Question

The following selected events were experienced by other Smith Eldercare Services, Inc. a corporation, or Tony Smith, its major stockholder (Click the loon to view the transactions) Requirement 1. State whether each event (1) increased, (2) decreased, of (3) had no effect on the total of the business Identify any species affected State whether each event (1) increased, (2) decreased, or (3) had no effect on the total assets of the business. Identify any specific ante affected. If no effect, indicate the reason Account affected or why Transaction Asset effect sets are not affected a. Paid $400 cash on accounts payable. Decreased b. Made a cash purchase of land for a building the for the business, $80,000 Noelect Asset accounts offset c. Sold land and received cash of $69.000 (the land was carried on the company's books at $69.000). No effect d. Received $15,400 cash from customers on account No effect Asset accounts offset e. Purchased medical equipment and signed a $90,000 promissory note in payment. Account affected or why ssel effect Transaction f. Purchased a flat-screen TV for Smith's home. g. Paid Smith a cash dividend of $4,000. h. Purchased office supplies on account for $1,200 L Borrowed $62.000 from the bank for use in the business Received $12.000 cash and issued stock to a stockholder.

Answer 1

Transaction	Asset effect	Account affected or why assets not affected
a	Decrease	Cash
b	No effect	Assets account offset	Cash decreased, land increased by same amount
c	No effect	Assets account offset	Cash increased, land decreased by same amount
d	No effect	Assets account offset	Cash increased, receivables decreased by same amount
e	Increase	Equipment
f	No effect	No asset account involved	Treated as drawings, assumed purchased on account
g	Decrease	Cash
h	Increase	Office Supplies
i	Increase	Cash
j	Increase	Cash

for (f) if we assume cash has been paid, then assets will decrease, account will be Cash