For each of the events (a) though (c), perform transaction analysis and indicate the account name, amount, and direction of the effects (+ for increase and for decrease) on the accounting equation. (a) The Firm received cash by organizers and distributed to them 1,200 shares of $0.7 par value common stock with a market price of $20 per share. (b) The Firm purchased the stock of other companies as investments, paying $3,500 cash; of this, $1,500 was in short-term investments and the remaining was in long-term investments. (c) The Firm purchased $5,200 of equipment, paying $1,200 in cash and owing the rest on accounts payable to the manufacturer.
For each of the events (a) though (c), perform transaction analysis and indicate the account name, amount, and direction of the effects (+ for increase and for decrease) on the accounting equation. (a) The Firm received cash by organizers and distributed to them 1,200 shares of $0.7 par value common stock with a market price of $20 per share. (b) The Firm purchased the stock of other companies as investments, paying $3,500 cash; of this, $1,500 was in short-term investments and the remaining was in long-term investments. (c) The Firm purchased $5,200 of equipment, paying $1,200 in cash and owing the rest on accounts payable to the manufacturer.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Please complete all requirement With Explanation and Do not give solution in image format
Transcribed Image Text:For each of the events (a) though (c), perform transaction analysis and indicate the account
name, amount, and direction of the effects (+ for increase and for decrease) on the accounting
equation.
(a) The Firm received cash by organizers and distributed to them 1,200 shares of $0.7 par value
common stock with a market price of $20 per share.
(b) The Firm purchased the stock of other companies as investments, paying $3,500 cash; of this,
$1,500 was in short-term investments and the remaining was in long-term investments.
(c) The Firm purchased $5,200 of equipment, paying $1,200 in cash and owing the rest on
accounts payable to the manufacturer.
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