Homework Answers
| Journal Entry For The Given Transaction | ||||||
| Debit | Credit | |||||
| Land | $ 600 | |||||
| Loan | $ 600 | |||||
| 5) | Therefore the increase in assets would be $600 | |||||
| Correct Option: C | ||||||
| 6) | The loan is a financial activity hence | |||||
| if we buy a loan it is a cash flow from financing activities | ||||||
| Hence option "a" is wrong. | ||||||
| The land is an investing activity. | ||||||
| If we buy land there is a cash outflow | ||||||
| Hence buying land is the cash outflow for investing activities | ||||||
| Hence option "b" is correct. | ||||||
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Purchased equipment inventory of $176,000 on the account.
Sold equipment for $202,500 cash (not including sales tax). A
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Study Questions and Problems at the end of Chapter 4, on pages 191
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