Effect of Transactions on Accounting Equation a.  A vacant lot acquired for $346,000 is sold for $668,000 in cash. What is the effect of the sale on the total amount of the seller's (1) assets, (2) liabilities, and (3) owner's equity? If there is no change, select 'No change' from the dropdown and then enter a '0' in the amount box.     Effect Amount 1. Total Assets     $fill in the blank 2   2. Total Liabilities     $fill in the blank 4   4. Owner's Equity     $fill in the blank 6   b.  Assume that the seller owes $97,000 on a loan for the land. After receiving the $668,000 cash in (a), the seller pays the $97,000 owed. What is the effect of the payment on the total amount of the seller's (1) assets, (2) liabilities, and (3) owner's equity? If there is no change, select 'No change' from the dropdown and then enter a '0' in the amount box.     Effect Amount 1. Total Assets     $fill in the blank 8   2. Total Liabilities     $fill in the blank 10   3. Owner's Equity     $fill in the blank 12   c.  Is it true that a transaction always affects at least two elements (Assets, Liabilities, or Owner's Equity) of the accounting equation?

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
icon
Related questions
Topic Video
Question
100%

Effect of Transactions on Accounting Equation

a.  A vacant lot acquired for $346,000 is sold for $668,000 in cash. What is the effect of the sale on the total amount of the seller's (1) assets, (2) liabilities, and (3) owner's equity? If there is no change, select 'No change' from the dropdown and then enter a '0' in the amount box.

    Effect Amount
1. Total Assets     $fill in the blank 2  
2. Total Liabilities     $fill in the blank 4  
4. Owner's Equity     $fill in the blank 6  

b.  Assume that the seller owes $97,000 on a loan for the land. After receiving the $668,000 cash in (a), the seller pays the $97,000 owed. What is the effect of the payment on the total amount of the seller's (1) assets, (2) liabilities, and (3) owner's equity? If there is no change, select 'No change' from the dropdown and then enter a '0' in the amount box.

    Effect Amount
1. Total Assets     $fill in the blank 8  
2. Total Liabilities     $fill in the blank 10  
3. Owner's Equity     $fill in the blank 12  

c.  Is it true that a transaction always affects at least two elements (Assets, Liabilities, or Owner's Equity) of the accounting equation?
 

Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 3 steps

Blurred answer
Knowledge Booster
Accounting Equation
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education