Determining Financial Statement Effects of Various Transactions Wolverine World Wide, Inc., manufactures military, work, sport, and casual footwear and leather accessories under a variety of brand names, such as Hush Puppies, Wolverine, Merrell, Stride Rite, and Bates, to a global market. The following transactions occurred during a recent year. Dollars are in millions. Issued common stock to investors for $21.4 cash (example). Purchased $1,626.6 of additional inventory on account. Paid $40.1 on long-term debt principal and $3.7 in interest on the debt. Sold $2,350.0 of products to customers on account; cost of the products sold was $1,426.6. (Hint: There are two separate effects needed for (d): one for earning revenue and one for incurring an expense.) Paid cash dividends of $23.0 to shareholders. Purchased for cash $32.4 in additional property, plant, and equipment. Incurred $713.6 in selling expenses, paying three-fourths in cash and owing the rest on account. Earned $0.50 of interest on investments, receiving 80 percent in cash. Incurred $35.0 in interest expense to be paid at the beginning of next year. page 148

Required: For each of the transactions, complete the tabulation, indicating the effect (+ for increase and − for decrease) of each transaction. (Remember that A = L + SE; R − E = NI; and NI affects SE through Retained Earnings.) Write NE if there is no effect. The first transaction is provided as an example.

Answer rating: 100% (QA)

Step 13 Trn 1 2 3a 3b 4a 4b 5 6 7 8 9 A Assets 2140 162660 4010 370 235000 142660 2300 ... View the full answer