Question

and IL DILS CIC d. Stockholders' equiry, as of December 31, 2018, assuming that assets increased by and liabilities decreased by $75,000 during 20YB. e. Net Income (or net loss) during 2048, assuming that as of December 31, 20YA... $1,275.000, liabilities were $290,000, and there were no dividends and no addition mon stock was issued. Obj. 2,4 E2-6 Effects of transactions on stockholders' equity For Target Corporation (TGT), indicate whether the following transactions would (1) (2) decrease, or (3) have no effect on stockholders' equity. 1. Borrowed money from the bank. b. Paid creditors. c. Made cash sales to customers. d. Purchased store equipment e. Pald dividends. f. Paid store rent g. Pald interest expense. h. Sold store equipment at a gain. i. Received interest revenue. i Pald taxes. - 1,2,4 E2-7 Effects of transactions on accounting equation Describe how the following business transactions affect the three elements of the account ing equation a. Received cash for services performed. b. Paid for utilities used in the business. c. Borrowed cash at local bank. d. Issued common stock for cash. e. Purchased land for cash. 1, 2,4 Assets sed by E2-8 Effects of transactions on accounting equation A vacant lot acquired for $500,000, on which there is a balance owed of $300,000, is sold for $660,000 in cash. The seller pays the $300,000 owed. What is the effect of these trans actions on the total amount of the seller's (1) assets, (2) liabilities, and (3) stockholders equity? E2-9 Effects of transactions on stockholders' equity Indicate whether each of the following types of transactions will (a) increase stockholders equity or (b) decrease stockholders' equity. a. Issued common stock for cash. b. Received cash for fees earned. c. Paid cash for utilities expense. d. Paid cash for rent expense. e. Paid cash dividends.

E2-6

E2-8

E2-10

Answer 1

E2-6

	effect on stockholders equity
a	no effect
b	no effect
c	increase
d	no effect
e	decrease
f	decrease
g	decrease
h	increase
i	increase
j	decrease

E2-8

assets	amount ($)
cost of land acquired	500000
balance owed on it	300000
total value	800000
sales value	660000
assets decreased by (sales value - total value)	-140000
liabilities	amount ($)
total liabilities decreased by (repayment of balance on land)	-300000
equities	amount ($)
total stockholders equity increased by ($660000 - $500000)	160000

E2-10

date	appropriate letter	assets($)	liabilities ($)	equity ($)
Nov-01	b	75000		75000
Nov-02	e	-5000		-5000
Nov-03	e	-3000		-3000
Nov-04	c	34500		34500
Nov-05	b	10000	10000
Nov-06	a	0
Nov-07	e	-75		-75
Nov-08	e	-10000		-10000
Nov-09	e	-2000		-2000
balance		99425	10000	89425