Using the balance sheet equation as illustrated , show how each of the above six events would affect the balance sheet of Raynor & Co. Fernandez & Co. 2 3 As

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Raynor & Co. experienced the following six events during the current year: 1. The sale of common stock to investors for $8 million cash. 2. The sale of a new bond issue to investors for $2 million cash. 3. The purchase of $400,000 of inventory for cash. 4. The purchase of $850,000 of equipment using bank financing. 5. The payment of $100,000 cash for income taxes associated with last year s operations. 6. The CFO determined that net income for the most recent month was $1 million. Assets Cash Inventory Equipment Total Assets Liabilities Taxes payable Notes payable Bonds payable S Shareholders equity Common stock Retained earnings OS OOOO 0 0 0 0 OOO 0 0 0 0 2 Fernandez & Co. 3 $0 OOOO 0 0 0 OOO 0 0 0 0 OO 0 0 05 OOOO 0 0 OOO 0 0 0 0 0.5 OOOO 0 0 0 000 0 0 5 0 OOO O 0 0 0 000 0 0 OOOO 0 0 0 0 0 OOO 0 0 0 Raynor & Co. experienced the following six events during the current year: 1. The sale of common stock to investors for $8 million cash. 2. The sale of a new bond issue to investors for $2 million cash. 3. The purchase of $400,000 of inventory for cash. 4. The purchase of $850,000 of equipment using bank financing. 5. The payment of $100,000 cash for income taxes associated with last year s operations. 6. The CFO determined that net income for the most recent month was $1 million. Assets Cash Inventory Equipment Total Assets Liabilities Taxes payable Notes payable Bonds payable S Shareholders equity Common stock Retained earnings OS OOOO 0 0 0 0 OOO 0 0 0 0 2 Fernandez & Co. 3 $0 OOOO 0 0 0 OOO 0 0 0 0 OO 0 0 05 OOOO 0 0 OOO 0 0 0 0 0.5 OOOO 0 0 0 000 0 0 5 0 OOO O 0 0 0 000 0 0 OOOO 0 0 0 0 0 OOO 0 0 0

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Transaction 1 Cash and Common Stock will increase as Cash is being invested in exchange of i... View the full answer