Question

During its first year of operations, Willie Winn Running Shoes entered into five transactions affecting shareholders' equity. The bar chart below depicts the company's total assets, total liabilities, and total shareholders' equity after each of five transactions. The bar on the left is total assets, and the stacked bar on the right includes total liabilities and total shareholders' equity. Beginning balances prior to Transaction 1 are $0. Answer the following questions: Effect on Assets, Liabilities, and Shareholders' Equity of Five Transactions $120,000 $100,000 Assets $80,000 Liabilities Stockholders' Equity $60,000 $40,000 $20,000 $0 Beg. = $0 1 2 3 4 5 Transactions

Answer 1

ANSWER 1- IT INCREASED THE ASSET AND STOCKHOLDER'S EQUITY

ANSWER 2(a)-IT INCREASED THE ASSET AND LIABILITY.

ANSWER 2(b)-THERE MIGHT BE PURCHASE OF SUPPLIES ON ACCOUNT WHICH HAD EFFECT ON INCREASE IN INVENTORY AND ACCOUNT PAYABLE

ANSWER 3(a)-IT INCREASED THE ASSET AND SHAREHOLDERS' EQUITY.

ANSWER3(b)-THERE MIGHT BE TRANSACTION OF SALE WHICH INCREASED THE CASH IN ASSET AND SALE REVENUE INCREASED THE SHAREHOLDER'S EQUITY.

ANSWER4(a)-THERE IS DECREASE IN ASSET AND SHAREHOLDER'S EQUITY.

ANSWER 4(b)- THERE MIGHT BE TRANSACTION OF PAYMENT OF EXPENSE WHICH DREASED THE CASH IN ASSET AND EXPENSE IN SHAREHOLDER'S EQUITY.

ANSWER5(a)-THERE IS DECREASE IN ASSET AND LIABILITY.

ANSWER5(b)- THERE MIGHT BE TRANSACTION OF PAYMENT OF SUPPLIER OF WHICH WE PURCHASED ON CREDIT WHICH DECREASED THE CASH AND ACCOUNT PAYABLE,