Analyzing Transactions Using the Financial Statement Effects Template Record the

Question

Analyzing Transactions Using the Financial Statement Effects Template

Record the effect of each of the following independent transactions using the fnancial statement effects template provided. Confrm that Assets = Liabilities + Equity.

using the information above,

Prepare journal entries for each of the transactions 1 through 9.

Set up T-accounts for each of the accounts used in part a and post the journal entries to those

T-accounts. (The T-accounts will not have opening balances.)

Balance Sheet Income Statement CashNoncash Asset Liabil- Contrib Capital EamedRevenues -Expenses Income Capital Net Transaction Assets ities (1)Receive $20,000 cash in exchange for common stock (2)Purchase $2,000 of (3)Sell inventory (4)Record $2,000 for cost (5)Collect $3,000 cash (6)Acquire $5,000 of inventory on credit. for $3,000 on credit. of inventory sold in 3 from transaction 3. equipment by signing a note (7)Pay wages of $1,000 in (8)Pay $5,000 on a note (9)Pay $2,000 cash. payable that came due cash dividend Totals

Explanation / Answer

Solution 1:

Solution 2:

Solution 3:

Transaction Balance Sheet Income Statement Cash Asset + Non Cash Assets = Liabilities + Contributed Capital + Earned Capital Revenue - Expenses = Net Income 1 $20,000.00 $20,000.00 2 $2,000.00 $2,000.00 3 $3,000.00 $3,000.00 $3,000.00 $3,000.00 4 -$2,000.00 -$2,000.00 $2,000.00 -$2,000.00 5 $3,000.00 -$3,000.00 6 $5,000.00 $5,000.00 7 -$1,000.00 -$1,000.00 $1,000.00 -$1,000.00 8 -$5,000.00 -$5,000.00 9 -$2,000.00 -$2,000.00

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