The following transactions took place during the year. (a) Recorded cash sales $8,000. (b) Purchased inventory for

Question:

The following transactions took place during the year.

(a) Recorded cash sales $8,000.
(b) Purchased inventory for $1,500 cash.
(c) Purchased new equipment $10,000; signed a short-term note payable for the cost of the equipment.
(d) Paid a $20,000 cash dividend to common stockholders.
(e) Acquired a building for $750,000, by signing a mortgage payable for $450,000 and issuing common stock for the balance.
(f) Made a principal payment on the mortgage currently due, $45,000.

Instructions
For each transaction listed on page 290, indicate whether it will increase (I), decrease (D), or have no effect (NE) on theratios.

Common Stock
Common stock is an equity component that represents the worth of stock owned by the shareholders of the company. The common stock represents the par value of the shares outstanding at a balance sheet date. Public companies can trade their stocks on... Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...