Financial Accounting: Tools for Business Decision Making, 8th Edition
8th Edition
ISBN: 9781118953808
Author: Paul D. Kimmel, Jerry J. Weygandt, Donald E. Kieso
Publisher: WILEY
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Chapter 3, Problem 3.2E
To determine
Accounting equation represents the relationship between assets, liabilities and shareholders’ equity. It is the foundation of double entry system and it helps to analyze the business transaction. Accounting equation displays the total assets are equal to the total liabilities and shareholders’ equities. Thus, the accounting equation is,
To show: The effect of each transaction on the accounting equation and explanation for changes to
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Sheridan Company entered into these transactions during May 2017, its first month of operations.
1. Stockholders invested $35,000 in the business in exchange for common stock of the company
Purchased computers for office use for $32,900 from Ladd on account.
2.
3.
Paid $3,600 cash for May rent on storage space.
4. Performed computer services worth $18,100 on account.
Performed computer services for Wharton Construction Company for $5,900 cash.
Paid Western States Power Co. $7,100 cash for energy usage in May.
Paid Ladd for the computers purchased in (2).
Incurred advertising expense for May of $1,800 on account.
9. Received $11,900 cash from customers for contracts billed in (4).
5.
6.
7.
8.
The Moon Service Inc. engaged in the following transactions during the month of November 2015:• Nov. 01: Issued 20,000 shares of common stock at $20 per share• Nov. 03: Paid office rent for the month of November $500.• Nov. 06: Purchased office supplies $250.• Nov. 12: Purchased office equipment on account $4,500• Nov. 16: Purchased business car for $25,000. Paid $10,000 cash and issued a note for the balance.• Nov. 21: Billed clients $24,000 on account.• Nov. 25: Declared dividends $3,000. The amount of dividends will be distributed in December.• Nov. 28: Paid utility bills for the month of November $180.• Nov. 29: Received $20,000 cash from clients billed on November 21.• Nov. 30: Paid salary for the month of November $7,500Required: Record the above transactions in a general journal.
During 2017, its first year of operations as a delivery service, Bramble Corp. entered into the following transactions.
1.
Issued shares of common stock to investors in exchange for $119,000 in cash.
2.
Borrowed $38,000 by issuing bonds.
3.
Purchased delivery trucks for $64,000 cash.
4.
Received $15,000 from customers for services performed.
5.
Purchased supplies for $6,000 on account.
6.
Paid rent of $4,300.
7.
Performed services on account for $11,300.
8.
Paid salaries of $26,700.
9.
Paid a dividend of $10,800 to shareholders.
Using the following tabular analysis, show the effect of each transaction on the accounting equation. Put explanations for changes to Stockholders’ Equity in the far right column.
Chapter 3 Solutions
Financial Accounting: Tools for Business Decision Making, 8th Edition
Ch. 3 - Prob. 1QCh. 3 - Can a business enter into a transaction that...Ch. 3 - Are the followingevents recorded in the accounting...Ch. 3 - Prob. 4QCh. 3 - Prob. 5QCh. 3 - Prob. 6QCh. 3 - Prob. 7QCh. 3 - Misty Reno, a beginning accounting student,...Ch. 3 - Prob. 9QCh. 3 - What is the normal balance for each of these...
Ch. 3 - Prob. 11QCh. 3 - Prob. 12QCh. 3 - Prob. 13QCh. 3 - Prob. 14QCh. 3 - Prob. 15QCh. 3 - (a) When entering a transaction in the journal,...Ch. 3 - (a) Should accounting transaction debits and...Ch. 3 - Journalize these accounting transactions. (a)...Ch. 3 - Prob. 19QCh. 3 - Prob. 20QCh. 3 - Prob. 21QCh. 3 - Prob. 22QCh. 3 - Prob. 3.1BECh. 3 - Prob. 3.2BECh. 3 - Prob. 3.3BECh. 3 - For each of the following accounts, indicate the...Ch. 3 - Prob. 3.5BECh. 3 - Prob. 3.6BECh. 3 - Prob. 3.7BECh. 3 - Tilton Corporation has the following transactions...Ch. 3 - Prob. 3.9BECh. 3 - Selected transactions for Montes Company are...Ch. 3 - Prob. 3.11BECh. 3 - Prob. 3.12BECh. 3 - Prob. 3.1DIECh. 3 - Prob. 3.2DIECh. 3 - Prob. 3.3DIECh. 3 - Prob. 3.4DIECh. 3 - Prob. 3.5DIECh. 3 - Prob. 3.1ECh. 3 - Prob. 3.2ECh. 3 - Prob. 3.3ECh. 3 - Prob. 3.4ECh. 3 - Prob. 3.5ECh. 3 - Prob. 3.6ECh. 3 - Prob. 3.7ECh. 3 - Prob. 3.8ECh. 3 - Prob. 3.9ECh. 3 - Prob. 3.10ECh. 3 - Prob. 3.11ECh. 3 - Prob. 3.12ECh. 3 - Prob. 3.13ECh. 3 - Prob. 3.14ECh. 3 - Prob. 3.15ECh. 3 - Prob. 3.16ECh. 3 - Prob. 3.17ECh. 3 - Prob. 3.18ECh. 3 - Prob. 3.19ECh. 3 - Prob. 3.20ECh. 3 - Prob. 3.21ECh. 3 - Prob. 3.22ECh. 3 - Prob. 3.1APCh. 3 - Prob. 3.2APCh. 3 - Prob. 3.3APCh. 3 - Prob. 3.4APCh. 3 - Prob. 3.5APCh. 3 - Prob. 3.6APCh. 3 - Prob. 3.7APCh. 3 - Prob. 3.8APCh. 3 - Prob. 3.9APCh. 3 - Prob. 3.10APCh. 3 - Prob. 3.11APCh. 3 - Prob. 3.1EYCTCh. 3 - Prob. 3.2EYCTCh. 3 - Prob. 3.3EYCTCh. 3 - Prob. 3.4EYCTCh. 3 - Prob. 3.6EYCTCh. 3 - Prob. 3.7EYCTCh. 3 - Prob. 3.8EYCTCh. 3 - Prob. 3.9EYCTCh. 3 - Prob. 3.11EYCTCh. 3 - Prob. 3.1IFRS
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