Restate the impact of Bayshore Radiology Center’s transactions on their balance sheet using these data:a. Transaction 2: The $200,000 equipment purchase is made with long-term borrowings instead of cash. b. Transaction 3: The $200,000 in supplies are purchased with cash instead of on trade credit.c. Transaction 4: The $50,000 in services provided are immediately paid for by patients instead of billed to third-party payers. ### Financial Transactions and Their Impact on Business Assets and ClaimsIn this educational article, we explore how various transactions affect a company's financial structure, focusing on Bayshore's business operations. The company undergoes different financial activities to demonstrate changes in assets and claims without altering overall totals initially.#### 2. Purchase of Equipment for CashTo enhance its operations, Bayshore buys diagnostic equipment for $200,000, paid in cash. This transaction alters the asset composition:- **Assets:** - Cash decreases to $800,000 - Net fixed assets increase to $200,000 - **Total Assets:** $1,000,000- **Claims:** - Common stock remains at $1,000,000 - **Total Claims:** $1,000,000*Overall, the total assets and total claims remain balanced at $1,000,000 as the company does not acquire new capital.*#### 3. Purchase of Supplies on CreditBayshore purchases medical supplies worth $20,000 on credit, showing:- **Assets:** - Cash remains $800,000 - Supplies increase to $20,000 - Net fixed assets stay at $200,000 - **Total Assets:** $1,020,000- **Claims:** - Accounts payable increase to $20,000 - Common stock is $1,000,000 - **Total Claims:** $1,020,000*Future benefits from the supplies increase assets, while liabilities rise proportionately due to accounts payable.*#### 4. Services Rendered for CreditBayshore renders services resulting in $50,000 billings, enhancing assets and equity:- **Assets:** - Cash remains $800,000 - Accounts receivable increase to $50,000 - Supplies stay $20,000 - Net fixed assets continue at $200,000 - **Total Assets:** $1,070,000- **Claims:** - Accounts payable remain $20,000 - Common stock at $1,000,000 - Retained earnings increase to $50,000 - **Total Claims:** $1,070,000*Revenue from services boosts accounts receivable and retained earnings, showing up as income and contributing to equity.*Overall, these transactions illustrate the fluidity and balance required in

The transactions occured in the business impacts the balances of different accounts.

Answered: Restate the impact of Bayshore…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Restate the impact of Bayshore Radiology Center’s transactions on their balance sheet using these data: a. Transaction 2: The $200,000 equipment purchase is made with long-term borrowings instead of cash. b. Transaction 3: The $200,000 in supplies are purchased with cash instead of on trade credit. c. Transaction 4: The $50,000 in services provided are immediately paid for by patients instead of billed to third-party payers.

### Financial Transactions and Their Impact on Business Assets and Claims

In this educational article, we explore how various transactions affect a company's financial structure, focusing on Bayshore's business operations. The company undergoes different financial activities to demonstrate changes in assets and claims without altering overall totals initially.

#### 2. Purchase of Equipment for Cash
To enhance its operations, Bayshore buys diagnostic equipment for $200,000, paid in cash. This transaction alters the asset composition:

- **Assets:**
- Cash decreases to $800,000
- Net fixed assets increase to $200,000
- **Total Assets:** $1,000,000

- **Claims:**
- Common stock remains at $1,000,000
- **Total Claims:** $1,000,000

*Overall, the total assets and total claims remain balanced at $1,000,000 as the company does not acquire new capital.*

#### 3. Purchase of Supplies on Credit
Bayshore purchases medical supplies worth $20,000 on credit, showing:

- **Assets:**
- Cash remains $800,000
- Supplies increase to $20,000
- Net fixed assets stay at $200,000
- **Total Assets:** $1,020,000

- **Claims:**
- Accounts payable increase to $20,000
- Common stock is $1,000,000
- **Total Claims:** $1,020,000

*Future benefits from the supplies increase assets, while liabilities rise proportionately due to accounts payable.*

#### 4. Services Rendered for Credit
Bayshore renders services resulting in $50,000 billings, enhancing assets and equity:

- **Assets:**
- Cash remains $800,000
- Accounts receivable increase to $50,000
- Supplies stay $20,000
- Net fixed assets continue at $200,000
- **Total Assets:** $1,070,000

- **Claims:**
- Accounts payable remain $20,000
- Common stock at $1,000,000
- Retained earnings increase to $50,000
- **Total Claims:** $1,070,000

*Revenue from services boosts accounts receivable and retained earnings, showing up as income and contributing to equity.*

Overall, these transactions illustrate the fluidity and balance required in

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

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