Question

Analyze the following transactions and show their effects on the basic accounting equation. a. C. Received $153,000 from investors buying shares in the company. b. Bought equipment for $52,700. Paid half in cash, with the remainder to be paid in six months. Bought inventory costing $47,700, on account. d. (ii.) Sold inventory costing $37,700 to customers, (i.) on account, for $54,700. e. Made a payment of $1,000 on accounts payable. f. Borrowed $27,700 from a bank. The interest on the loan is 6% per year. g. Depreciated equipment by $1,160. h. Paid $780 for supplies to be used in the future. i. Paid $250 to the power company for electricity used during the period. j. Declared and paid dividends of $8,100.

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Answer 1

Liabilities ShareHolder's Equity Accounts Payable Loan Payable Common Share Retained Earnings Inventory Supplies Equipment a 153,000 52,700 = 26,350 47,700 47,700 37,700 = 54700 1 The question is based upon the accouting equation 2 2 Assets = Liabilities + Equity + 3 4 Assets 5 S.NO Cash Accounts Receviable 6 7 a 153,000 8 lb -26350 9 C 10 d (1) 37,700 11 d (2) 54,700 12 e -1000 13 f 27,700 14 g g 15 h -780 16 i -250 17 -8100 18 Total 181,920 54,700 19 20 21 Total Assets 338,960 Total Liabilities 22 and Equity 338,960 23 -1000 27,700 1160 1160 = = 780 = -250 -8100 47,700 780 53,860 = 73,050 27,700 153,000 85,210