Chapter 1, Problem 1BPSB

Problem 1-1B Identifying effects of transactions on financial statements A1 P1

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.

a.		b.
	Income
Balance Sheet	Statement	Statement of Cash Flows

	Transaction	TotalAssets	Total Liab.	Total Equity	NetIncome	Operating Activities	Investing Activities	Financing Activities
1	Owner invests $800 cash in business	+800		+800				+800
2	Purchases $100 of supplies on credit
3	Buys equipment for $400 cash
4	Provides services for $900 cash
5	Pays $400 cash for rent incurred
6	Buys $200 of equipment or credit
7	Pays $300 cash for wages incurred
8	Owner withdraws $50 cash
	Provides $600 services on credit
10	Collects $600 cash on accounts receivable