EA16. Discuss how each of the following transactions for Watson, International, will affect assets, liabilities, and stockholders’ equity, and prove the company’s accounts will still be in balance. A. An investor invests an additional $25,000 into a company receiving stock in exchange. B. Services are performed for customers for a total of $4,500. Sixty percent was paid in cash, and the remaining customers asked to be billed. C. An electric bill was received for $35. Payment is due in thirty days. D. Part-time workers earned $750 and were paid. E. The electric bill in “C” is paid. Your answer: (Answer B, C, D, and E by referring to the answer example for A) A. (as an example, the answer for A. is shown below) Cash will increase $25,000, so total assets will increase $25,000. Common stock will increase $25,000, increasing total stockholders’ equity $25,000. There is an equal increase on each side of the equation. There is an equal decrease on each side of the equation.
EA16. Discuss how each of the following transactions for Watson, International, will affect assets, liabilities, and
A. An investor invests an additional $25,000 into a company receiving stock in exchange.
B. Services are performed for customers for a total of $4,500. Sixty percent was paid in cash, and the remaining customers asked to be billed.
C. An electric bill was received for $35. Payment is due in thirty days.
D. Part-time workers earned $750 and were paid.
E. The electric bill in “C” is paid.
Your answer: (Answer B, C, D, and E by referring to the answer example for A)
A. (as an example, the answer for A. is shown below)
Cash will increase $25,000, so total assets will increase $25,000.
Common stock will increase $25,000, increasing total stockholders’ equity $25,000.
There is an equal increase on each side of the equation.
There is an equal decrease on each side of the equation.
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
