HORNGREN'S FIN.+...V.1(LL)-W/ACCESS >C<
16th Edition
ISBN: 9781323169360
Author: MILLER-NOBLES
Publisher: PEARSON C
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Textbook Question
Chapter 1, Problem 1.27E
Using the
Indicate the effects of the following business transactions on the accounting equation for Sam’s Snack Foods, a supplier of snack foods. Transaction (a) is answered as a guide.
- a. Sam’s Snack Foods received cash from issuance of common stock to stockholders.
Answer: Increase asset (Cash); Increase equity (Common Stock)
- b. Cash purchase of land for a building site.
- c. Paid cash on accounts payable.
- d. Purchased equipment; signed a note payable.
- e. Performed service for a customer on account.
- f. Employees worked for the week but will be paid next Tuesday.
- g. Received cash from a customer on
accounts receivable . - h. Borrowed money from the bank.
- i. Cash dividends paid to stockholders.
- j. Incurred utilities expense on account.
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A number of business transaction carried out by smalling manufacturing company are as follows
Borrowed money from a bank
Sold land for cash at a price equal to its cost
Paid a liability
Purchases a computer on credit
The owner invested cash in the business
Purchase office equipment on cash
Collected an account receivable
Indicate the effects of each these transaction on the total amount of the company’s assets, liabilities and owner’s equity. Organize your answer in tabular form using the following column heading and the code letter I for increase D for decrease and NE for no effect the answer for transaction a is provided as an example
Transaction Assets = liabilities + owner’s equity
I = I
A number of business transactions carried out by Green River Frame are shown below:
The owner invested cash in the business.
Purchased a computer on credit
Purchased office equipment for cash.
Purchased small office building for cash and credit both.
Collected notes receivables.
Sold land for cash at a price equal to its cost.
Borrowed money from bank.
Paid a lability.
Received cash from computer store.
Owner’s drawing.
Instructions: Indicate the effects of each of these transactions upon the total amounts of the company’s assets, liabilities and owner’s equity. Organize your answer in tabular form using the column headings shown below and the code letters I for increase, D for decrease and NE for no effect.
For each transaction a through f, identify its impact on the accounting equation (select from 1 through 5 below). a. The company pays cash toward an account payable. b. The company purchases equipment on credit. c. The owner invests cash in the business. d. The owner withdraws cash from the business. e. The company purchases supplies for cash. f. The company provides services for cash. 1. Decreases an asset and decreases equity. 2. Increases an asset and increases a liability. 3. Decreases an asset and decreases a liability. 4. Increases an asset and decreases an asset. 5. Increases an asset and increases equity.
Chapter 1 Solutions
HORNGREN'S FIN.+...V.1(LL)-W/ACCESS >C<
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