Th e fi nancial statements of Shoppers Drug Mart are presented in Appendix A at the end of this book. They contain the following selected accounts:

Accounts payable and accrued liabilities............... Income tax expense

Accounts receivable................................................... Inventory

Cash.......................................................................... Land

Dividends................................................................... Sales

Instructions

(a) Identify the type (assets, liabilities, or shareholders' equity) of account for each of the above. For any shareholders' equity accounts, indicate whether the account is a dividend, revenue, or expense.

(b) What is the increase (debit or credit) and decrease (debit or credit) side for each account? What is the normal balance for each account?

(c) Identify the probable other account(s) in each transaction listed below and the effect on that (those) other account(s) when:

1. Dividends are paid.

2. Income tax is paid.

3. Inventory is purchased on account.

4. Land is purchased by signing a bank loan payable.

5. Sales are made on account.

(d) In which financial statement (statement of earnings, statement of changes in shareholders' equity, or balance sheet) is each account included?