The following chart to show the effect of each transaction on the accounting equation. Transaction Assets = Liabilities + Shareholders’ Equity 1. Owners contributed $30,000 cash. 2. Purchased property for $20,000 cash. 3. Borrowed $9,000 cash from bank. 4. Provided services for $8,000 on account. 5. Paid $5,500 cash for expenses. 6. Paid $500 cash dividend to owners. Effect of each transaction on the accounting equation
The following chart to show the effect of each transaction on the accounting equation. Transaction Assets = Liabilities + Shareholders’ Equity 1. Owners contributed $30,000 cash. 2. Purchased property for $20,000 cash. 3. Borrowed $9,000 cash from bank. 4. Provided services for $8,000 on account. 5. Paid $5,500 cash for expenses. 6. Paid $500 cash dividend to owners. Effect of each transaction on the accounting equation
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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The following chart to show the effect of each transaction on the
Transaction | Assets = Liabilities + Shareholders’ Equity |
---|
1. Owners contributed $30,000 cash.
2. Purchased property for $20,000 cash.
3. Borrowed $9,000 cash from bank.
4. Provided services for $8,000 on account.
5. Paid $5,500 cash for expenses.
6. Paid $500 cash dividend to owners.
Effect of each transaction on the accounting equation
Particulars | Assets= | Liability+ | Equity |
Owners contributed $30,000 cash. | $30,000 | 0 | $30,000 |
Purchased property for $20,000 cash. | $20,000-$20,000 | 0 | 0 |
Borrowed $9,000 cash from bank. | $9,000 | $9,000 | 0 |
Provided services for $8,000 on account. | $8,000 | 0 | $8,000 |
Paid $5,500 cash for expenses. | ($5,500) | ($5,500) | |
Paid $500 cash dividend to owners. | ($500) | 0 | ($500 ) |
Consider the same transactions as above, but this time complete the following chart, using a separate sheet of paper.
Assets | = | Liabilities | + |
Shareholders’ Equity |
Trans. | Cash | Property | = | Notes Payable | + | Common Stock | ||
1. 2. 3. 4. 5. 6. |
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