PROBLEM SET AIdentify how each of the following separate transactions 1 through

Question

PROBLEM SET AIdentify how each of the following separate transactions 1 through 10 affects financial statements. For increases, place a "+" and the dollar amount in the column or columns. For decreases, place a"-"and the dollar amount in the column or columns. Some cells may contain both an increase (+) and a decrease (-) along with dollar amounts. The first transaction is completed as an example 1-1A Identifying effects of transactions on financial statements Required a. For the balance sheet, identify how each transaction affects total assets, total liabilities, and total eq- A1 P1 uity. For the income statement, identify how each transaction affects net income. b. For the statement of cash flows, identify how each transaction affects cash flows from operating ac- tivities, cash flows from investing activities, and cash flows from financing activities Income Statement Balance Sheet Statement of Cash Flows Total Income Operating Total Net Total Liab. Activities Activities 1Owner invests $900 cash in business +900 +900 in exchange for stock +900 2 Receives $700 cash for services provided 3 Pays $ 4 5 Incurs $100 legal costs on credit Purchases $200 of supplies on credit 6Buys equipment for $300 cash Pays $200 on accounts payable s $400 services on credit Pays $50 cash for dividends 9 10 Collects $400 cash on accounts receivable

Explanation / Answer

Impact of each transaction :

+300

-300

+400

-400

Balance Sheet Income statement Statement of cash flow Transaction Total Assets Total Liab. Total equity Net income Operating activities Investing activities Financing activities 1 Owner invest $900 Cash in bussiness in exchange for stock +900 +900 +900 2 Receive $700 Cash for service provided +700 +700 +700 +700 3 Pay $500 cash for employee wages -500 -500 -500 -500 4 Incur $100 legal cost on credit +100 -100 -100 5 purchase $200 supplies on credit +200 +200 6 Buy equipment for $300 Cash

+300

-300

-300 7 Pays $200 on account payable -200 -200 -200 8 Provide $400 service on credit +400 +400 +400 9 Pays $50 cash for dividend -50 -50 -50 10 Collect $400 cash on account receivable

+400

-400

+400

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