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Cornerstones of Financial Accounti...

4th Edition
Jay Rich + 1 other
ISBN: 9781337690881

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Cornerstones of Financial Accounti...

4th Edition
Jay Rich + 1 other
ISBN: 9781337690881
Textbook Problem
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OBJECTIVE 9 Exercise 2-47 Debit and Credit Effects of Transactions

Lincoln Corporation was involved in the following transactions during the current year:

  1. Lincoln borrowed cash from the local bank on a note payable.
  2. Lincoln purchased operating assets on credit.
  3. Lincoln paid dividends in cash.
  4. Lincoln purchased supplies inventory on credit.
  5. Lincoln used a portion of the supplies purchased in Transaction d.
  6. Lincoln provided services in exchange for cash from the customer.
  7. A customer received services from Lincoln on credit.
  8. The owners invested cash in the business in exchange for common stock.
  9. The payable from Transaction d was paid in full.
  10. The receivable from Transaction g was collected in full.
  11. Lincoln paid wages in cash.

Required:

Prepare a table like the one shown below and indicate the effect on assets, liabilities, and stock-holders, equity. Be sure to enter debits and credits in the appropriate columns for each of the transactions. Transaction a is entered as an example:

Chapter 2, Problem 47E, OBJECTIVE 9 Exercise 2-47 Debit and Credit Effects of Transactions Lincoln Corporation was involved

To determine

Introduction:

The accounting equation suggests that the assets must be equal to the addition of liabilities and stockholders’ equity. A business transaction is recorded and presented in financial statement when it affects the elements of the accounting equation.

To Prepare :

Prepare the table to show the effects the transactions on assets, liabilities, and stockholders’ equity.

Explanation
    ParticularIncreaseDecrease
    AssetsDebitCredit
    LiabilitiesCredit

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