Presented below is a list of possible transactions. Analyze the effect of the 18 transactions on the
Fantastic news! We've Found the answer you've been seeking!
Question:
Presented below is a list of possible transactions.
Analyze the effect of the 18 transactions on the financial statement categories indicated.
Transactions | Assets | Liabilities | Owners' Equity | Net Income | |
1. | Purchased inventory for $80,000 on account (assume the perpetual system is used). | Decrease, Increase, No net effect | Decrease, Increase, No net effect | Decrease, Increase, No net effect | Decrease, Increase, No net effect |
2. | Issued an $80,000 note payable in payment on account (see item 1 above). | Decrease, Increase, No net effect | Decrease, Increase, No net effect | Decrease, Increase, No net effect | Decrease, Increase, No net effect |
3. | Recorded accrued interest on the note from item 2 above. | Decrease, Increase, No net effect | Decrease, Increase, No net effect | Decrease, Increase, No net effect | Decrease, Increase, No net effect |
4. | Borrowed $100,000 from the bank by signing a 6-month, $112,000, zero-interest-bearing note. | Decrease, Increase, No net effect | Decrease, Increase, No net effect | Decrease, Increase, No net effect | Decrease, Increase, No net effect |
5. | Recognized 4 months' interest expense on the note from item 4 above. | Decrease, Increase, No net effect | Decrease, Increase, No net effect | Decrease, Increase, No net effect | Decrease, Increase, No net effect |
6. | Recorded cash sales of $75,260, which includes 6% sales tax. | Decrease, Increase, No net effect | Decrease, Increase, No net effect | Decrease, Increase, No net effect | Decrease, Increase, No net effect |
7. | Recorded wage expense of $35,000. The cash paid was $25,000; the difference was due to various amounts withheld. | Decrease, Increase, No net effect | Decrease, Increase, No net effect | Decrease, Increase, No net effect | Decrease, Increase, No net effect |
8. | Recorded employer's payroll taxes. | Decrease, Increase, No net effect | Decrease, Increase, No net effect | Decrease, Increase, No net effect | Decrease, Increase, No net effect |
9. | Accrued accumulated vacation pay. | Decrease, Increase, No net effect | Decrease, Increase, No net effect | Decrease, Increase, No net effect | Decrease, Increase, No net effect |
10. | Recorded an asset retirement obligation. | Decrease, Increase, No net effect | Decrease, Increase, No net effect | Decrease, Increase, No net effect | Decrease, Increase, No net effect |
11. | Recorded bonuses due to employees. | Decrease, Increase, No net effect | Decrease, Increase, No net effect | Decrease, Increase, No net effect | Decrease, Increase, No net effect |
12. | Recorded a contingent loss on a lawsuit that the company will probably lose. | Decrease, Increase, No net effect | Decrease, Increase, No net effect | Decrease, Increase, No net effect | Decrease, Increase, No net effect |
13. | Accrued warranty expense (assume expense warranty approach). | Decrease, Increase, No net effect | Decrease, Increase, No net effect | Decrease, Increase, No net effect | Decrease, Increase, No net effect |
14. | Paid warranty costs that were accrued in item 13 above. | Decrease, Increase, No net effect | Decrease, Increase, No net effect | Decrease, Increase, No net effect | Decrease, Increase, No net effect |
15. | Recorded sales of product and related service-type warranties. | Decrease, Increase, No net effect | Decrease, Increase, No net effect | Decrease, Increase, No net effect | Decrease, Increase, No net effect |
16. | Paid warranty costs under contracts from item 15 above. | Decrease, Increase, No net effect | Decrease, Increase, No net effect | Decrease, Increase, No net effect | Decrease, Increase, No net effect |
17. | Recognized warranty revenue (see item 15 above). | Decrease, Increase, No net effect | Decrease, Increase, No net effect | Decrease, Increase, No net effect | Decrease, Increase, No net effect |
18. | Recorded estimated liability for premium claims outstanding. | Decrease, Increase, No net effect | Decrease, Increase, No net effect | Decrease, Increase, No net effect | Decrease, Increase, No net effect |
Related Book For
Intermediate Accounting IFRS
ISBN: 978-1119372936
3rd edition
Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield
Posted Date: