Question

1. Enter the change for each balance sheet item for the following transactions as a + or - number. Enter amounts in thousands. Do not enter commas. Remember: assets = liabilities + equity:

Founder invests $400,000 in savings and borrows $200,000 from relatives to start business Cash $ ___ . Fill in the blank. Equity $ ___. Fill in the blank. Loan $ ___.

Sale of used equipment with a book value of $300,000 for $500,000 cash. Cash $ ___-. Fill in the blank. Plant and equipment $ ___-.. Equity $ ___.

. Purchase of a new $1 million building, financed 40% with cash and 60% with a bank loan Plant and equipment $ ___. Cash $ ____. . Loan $ ___

,. Purchase of equipment for $60,000 cash Plant and equipment $ ___. Cash $ ___ .

A $40,000 payment to a supplier to pay off a payable Cash $ ____ .. Accounts payable $ ___

. A firm’s repurchase of 10,000 shares of its own stock at a price of $24 per share Cash $ ___. . Equity $ ___ .

Sale of merchandise for $80,000 in cash with inventory costs of $60,000 Cash $ ____ Inventory $____. Equity $ ____

Purchase of $200,000 inventory from a supplier on a payable Inventory $ ___. Accounts payable $ ____

Sale of merchandise for $120,000 on credit with inventory costs of $90,000 Accounts receivable $ ____ Inventory $ ____ Equity $ _____.

Dividend payment to shareholders of $50,000 Cash $ ____. Equity $ ____ .

Use the above transactions to complete the following balance sheet. Enter amounts in thousands. Do not enter commas. Remember: assets = liabilities + equity:

Cash $____ Accounts Receivable $ ___ Inventory $ ____ Plant & Equipment $ ___ Total Assets $ ___ Accounts Payable $ ____ Loans $ ____ Equity $ ____ Total Liabilities + Equity $ _____

Answer 1