Identify how each of the following separate transactions 1 through 10 affects financial statements. For increases, place a "+" and the dollar amount in the column or columns. For decreases, place a "-" and the dollar amount in the column or columns. Some cells may contain both an increase (+) and a decrease (-) along with dollar amounts. The first transaction is completed as an example. Required: a. For the balance sheet, identify how each transaction affects total assets, total liabilities, and total equity. For the income statement, identify how each transaction affects net income. b. For the statement of cash flows, identify how each transaction affects cash flows from operating activities, cash flows from investing activities, and cash flows from financing activities. Transaction 1. Owner invests $675 cash in business in exchange for stock 2. Receives $475 cash for services provided 3. Pays $595 cash for employee wages 4. Buys $725 of equipment on credit 5. Purchases $825 of supplies on credit 6. Buys equipment for $925 cash 7. Pays $765 on accounts payable 8. Provides $965 of services on credit 9. Pays $615 cash in dividends 10. Collects $990 cash on accounts receivable Answer is complete but not entirely correct. Total Assets +675 -675 +675 +675 Balance Sheet X+675 X+675 +675 X+675 X+675 +675 X+675 +675 X+675 +675 X+675 +675 X+675 +675 Income Statement Net Income Total Total Liabilities Equity +675 X+675 X+675 X+675 X+675 +675 +675 X+675 +675 X+675 X+675 X+675 X+675 X+675 X+675 X+675 X+675 X+675 X+675 +675 +675 X+675 X+675 X+675 X+675 X+675 30 Statement of Cash Flows Operating Investing Financing Activities Activities Activities +675 b. X+675 X+675 X+675 X+675 X+675 X+675 +675 X+675 X+675 X+675 X+675 X+675 +675 X+675 X+675 X+675 X+675 X+675 X+675 X+675 X+675 XXXXXXXXX x x x x x x x
Identify how each of the following separate transactions 1 through 10 affects financial statements. For increases, place a "+" and the dollar amount in the column or columns. For decreases, place a "-" and the dollar amount in the column or columns. Some cells may contain both an increase (+) and a decrease (-) along with dollar amounts. The first transaction is completed as an example. Required: a. For the balance sheet, identify how each transaction affects total assets, total liabilities, and total equity. For the income statement, identify how each transaction affects net income. b. For the statement of cash flows, identify how each transaction affects cash flows from operating activities, cash flows from investing activities, and cash flows from financing activities. Transaction 1. Owner invests $675 cash in business in exchange for stock 2. Receives $475 cash for services provided 3. Pays $595 cash for employee wages 4. Buys $725 of equipment on credit 5. Purchases $825 of supplies on credit 6. Buys equipment for $925 cash 7. Pays $765 on accounts payable 8. Provides $965 of services on credit 9. Pays $615 cash in dividends 10. Collects $990 cash on accounts receivable Answer is complete but not entirely correct. Total Assets +675 -675 +675 +675 Balance Sheet X+675 X+675 +675 X+675 X+675 +675 X+675 +675 X+675 +675 X+675 +675 X+675 +675 Income Statement Net Income Total Total Liabilities Equity +675 X+675 X+675 X+675 X+675 +675 +675 X+675 +675 X+675 X+675 X+675 X+675 X+675 X+675 X+675 X+675 X+675 X+675 +675 +675 X+675 X+675 X+675 X+675 X+675 30 Statement of Cash Flows Operating Investing Financing Activities Activities Activities +675 b. X+675 X+675 X+675 X+675 X+675 X+675 +675 X+675 X+675 X+675 X+675 X+675 +675 X+675 X+675 X+675 X+675 X+675 X+675 X+675 X+675 XXXXXXXXX x x x x x x x
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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