The analytical framework used to evaluate transactions inreproduced below: Cash

Question

The analytical framework used to evaluate transactions inreproduced below:
Cash + Non-cash Assets = Liabilities + Contributed Capital +Accumulated Other Comprehensive Income + Retained Earnings
Using this analytical framework, indicate the effect of each of thefollowing transactions for Henderson Corporation:
1. Henderson sold merchandise for $225,000 on account, which costs$170,000 to manufacture.
2. Henderson purchased for cash $110,000 of raw materialinventory.
3. The company paid $25,000 in advance for an advertising campaignthat would be aired next year.
4. Henderson paid its employees $15,000 for the month.
5. The company purchased $7,000 of supplies on account.
6. Henderson issued $25,000 of long-term debt.
7. The company used $10,000 of excess cash to purchase marketablesecurities.
8. Henderson purchased a machine for $22,000 in cash.
9. At the end of the year Henderson paid dividends of $5,000.
10. At the end of the year the marketable securities that Hendersonpurchased in transaction 7 were now worth $11,500.
11. Depreciation for the period was $1,500.

Explanation / Answer

=

+

+

+

No Cash + Non Cash Assets

=

Liabilities

+

Contributed Capital

+

Accumulated

+

Retained other comprehensive Earnings 1 inventory (225,000.00) Income Accounts Receivable 225,000.00 2 (110,000.00) Inventory 110,000.00 3 (25,000.00) Prepaid expenses 25,000.00 4 (15,000.00) (15,000.00) 5 inventory 7,000.00 7,000.00 6 25,000.00 25,000.00 7 (10,000.00) Marketable securities 10,000.00 8 (22,000.00) Machine 22,000.00 9 (5,000.00) (5,000.00) 10 no effect 11 Depreciation (1,500.00) (1,500.00)

Related Questions

Navigate

• Browse (All)
• Browse T
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.