Brief Exercise 3-3 During 2017, Crane Company entered into the following transac

Question

Brief Exercise 3-3 During 2017, Crane Company entered into the following transactions. 1. Purchased equipment for $328,760 cash 2. Issued common stock to investors for $135,970 cash. 3. Purchased inventory of $72,280 on account. Using the following tabular analysis, show the effect of each transaction on the accounting equation. For Retained Earnings, use separate columns for Revenues, Expenses, and Dividends if necessary. (Ifa transaction causes a decrease in Assets, Liabilities or Stockholders Equity, place a negative sign (or parentheses) in front of the amount entered for the particular Asset, Liability or Equity item that was reduced. See Illustration 3-3 for example.) Assets Liabilities +Stockholders' Equity Cash+ + Inventory +Equipment Accounts Payable + Common Stock Retained Earnings

Explanation / Answer

Assets Liabilities Shareholder's Equity Activity Cash "+"   Inventory "+" Equipment "=" Account Payable "+" Common Stock "+" Retained Earnings 1) Purchased Equipment for Cash $                            -3,28,760 "+"   $                               -   "+" $               3,28,760 "=" $                                  -   "+" $                                    -   "+" $                   -   2) Issued Common stock $                    1,35,970 "+"   $                               -   "+" $                            -   "=" $                                  -   "+" $               1,35,970 "+" $                   -   3) Purhcased Inventory $                              -   "+"   $              72,280 "+" $                            -   "=" $                 72,280 "+" $                                    -   "+" $                   -

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