Question

E3-6 Determining Financial Statement Effects of Various Transactions LO3-4 Wolverine World Wide, Ine., manufactures military, work, sport, and casual footwear and leather accessories under a variety of brand names, such as Hush Puppies, Wolverine, Merrell, Stride Rite, and Bates, to a global market. The following transactions occurred during a recent year. Dollars are in thousands a. Issued common stock to investors for $14,083 cash (example). b. Purchased $378,418 of additional inventory on account. c. Borrowed $11,000 d. Sold $1,409,068 of products to customers on account; cost of the products sold was $852,316. e. Paid cash dividends of $22,737 t. Purchasod for cash $19,397 in addlitonal property, plant, and equipment g. Incurred $386,540 in selling expenses, paying three fourths in cash and owing the rest on account. h. Earned $370 interest on Investments, receving 90 percent in cash i. Incurred $1,395 in interest expense to be paid at the beginning of next year. Required: For each of the transactions, complete the tabulation, indicating the effect (positive value for increase, negative value for decrease, and leave blank if no effect) of each transaction. (Remember thatA L+SC:R-NI: and NI affects SE through Retained Earnings.) The first transaction is provided as an example. (Enter the revenue side and the cost of goods sold side of the transaction on separate lines in the table. Do not net the effects on Stockholders' Equity or Net Income.) Balance Sheet Statement Transaction Assots Liabilities Rovonues Expenses Not Income

Answer 1

Balance Sheet Income statement TransactionAssets Liabilities Stockholders' equity Revenues ExpensesNet income 14,083 14,083 878,418 878,418 C. 11,000 11,000 1,409,068 852,316) 1,409,068 1,409,068 1,409,068 (852,316)(852,316) 852,316 22,737 22,737 19,397 19,397 289,905 96,635 386,540 370 1,395 (386,540) (386,540 370 1,395 370 370 1,395 1,395