Determining Financial Statement Effects of Various Transactions
Wolverine World Wide, Inc., manufactures military, work, sport, and casual footwear and leather accessories under a variety of brand names, such as Hush Puppies, Wolverine, Merrell, Stride Rite, and Bates, to a global market. The following transactions occurred during a recent year. Dollars are in thousands.
- a. Issued common stock to investors for $14,083 cash (example).
- b. Purchased $878,418 of additional inventory on account.
- c. Borrowed $11,000.
- d. Sold $1,409,068 of products to customers on account; cost of the products sold was $852,316.
- e. Paid cash dividends of $22,737.
- f. Purchased for cash $19,397 in additional property, plant, and equipment.
- g. Incurred $386,540 in selling expenses, paying three-fourths in cash and owing the rest on account.
- h. Earned $370 interest on investments, receiving 90 percent in cash.
- i. Incurred $1,395 in interest expense to be paid at the beginning of next year.
Required:
For each of the transactions, complete the tabulation, indicating the effect (+ for increase and − for decrease) of each transaction. (Remember that A = L + SE; R − E = NI: and NI affects SE through
INCOME STATEMENT | ||||||
Transaction | Assets | Liabilities | Stockholders’ Equity | Revenues | Expenses | Net Income |
(a) (example) | +14,083 | NE | +14,083 | NE | NE | NE |
Trending nowThis is a popular solution!
Chapter 3 Solutions
GB 112/212 MANAGERIAL ACC. W/ACCESS >C<
- Managerial AccountingAccountingISBN:9781337912020Author:Carl Warren, Ph.d. Cma William B. TaylerPublisher:South-Western College PubFinancial And Managerial AccountingAccountingISBN:9781337902663Author:WARREN, Carl S.Publisher:Cengage Learning,
- Financial Accounting: The Impact on Decision Make...AccountingISBN:9781305654174Author:Gary A. Porter, Curtis L. NortonPublisher:Cengage LearningManagerial Accounting: The Cornerstone of Busines...AccountingISBN:9781337115773Author:Maryanne M. Mowen, Don R. Hansen, Dan L. HeitgerPublisher:Cengage LearningFinancial AccountingAccountingISBN:9781305088436Author:Carl Warren, Jim Reeve, Jonathan DuchacPublisher:Cengage Learning