Question

FootCovers, Inc., with headquarters in Beaverton, Oregon, is one of the world’s leading manufacturers of athletic shoes and sports apparel. The following activities occurred during a recent year. The amounts are rounded to millions.

a. Purchased additional buildings for $188 and equipment for $260; paid $402 in cash and signed a long-term note for the rest.

b. Issued 90 shares of $2 par value common stock for $350 cash.

c. Declared $135 in dividends to be paid in the following year.

d. Purchased additional short-term investments for $7,716 cash.

e. Several FootCovers investors sold their own stock to other investors on the stock exchange for $82.

f. Sold $4,413 in short-term investments for $4,413 in cash.

For each of the events (a) through (f), perform transaction analysis and indicate the account, amount, and direction of the effect (+ for an increase and - for decrease) on the accounting equation. Check that the accounting equation remains in the balance after each transaction.

Answer 1

Following are the answer:-