Question

CP 1-1 The following list covers many of the types of financial transactions. Notice that each transaction has an equal and offsetting effect on the accounting equation. Types of accounting transactions ASSETS = LIABILITIES + STOCKHOLDERS EQUITY (+) (+) (+) (+)(-) (-) (-) nimi wooo III (+) (-) (+)(-) (+)(-) Required: Using the appropriate accounting equation, study the following transactions and identify the effect of each on assets, liabilities and stockholders' equity, as applicable. Use a (+) to denote an increase and a (-) to denote a decrease, if any. A = L+E Example: |||| ||||| |||| || || || Issued common stock for cash Purchased a truck for cash Received a bank loan to pay for equipment Purchased the equipment for cash Made a deposit for electricity service to be provided in the future Paid rent for the month just ended Signed a new union contract that provides for increased wages in the future Hired a messenger service to deliver letters during a mail strike Received a parcel; paid the delivery service Billed customers for services performed Made a cash payment to satisfy an outstanding obligation | |||| |||| |||

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Answer 1

Solution ... 1 Transactions. common stock Assets - Liabilities + Stoele holders' Equity Issued for cash. (+) (+) purchased a truck for cash. co/T(+) a bank loan to pay E (+) BL (+) Received equipment. purchased the equipment for cash. C- E (+) Service to ci) ID(+) Made a be provided deposit in for the electricity future. C(-) paid rent for the month Just ended. provides Signed a new for increased union wages contract the that future. 1 Cote - 1 in to deliver letters [Note-2 tired during Received a messenger service a mail strike. a parcel; paid the delevery service. C (-)

Continued..... 2 Assets - Liabilities + Stockholders Equity Transactions customers 10. Billed for services performed AR(+) (+) C(-) (+) / (-) C(+) 11. Made a cath payment to satisfy an outstanding obligation 12. Received a payment of cash in satisfaction of an amount owned by a customer. 13. Collected cash from a customer for services rendered the same day. paid cash for truck operating expenses. (gas, oilete) Made Monthly payment on the bank loan ; this payment included a payment on part of the loan and also an amount of interest expense. Issued stock in the company to pay off a loan 17. paid a dividend with cath. c(-) oo c ) B.L (-) (-) Greter Note -3) L C(-)

Contineud ....... Notes C - Cash T - Truck E - Equipment BL - Bank loan D - Deposit AR - Accounts L - Loan Receiveable 1 Merely signing a contract for future not mean the company is increasing (on anet on liability at the time of the transaction does- decreasing an signing. (2) No effect on e service mail strike assets cop liabilities to deliver the by letters hired a messenger during the (3) Here, made a monthly payment on baute loan; this payment included a payment on part of loan and also an amount of interest expense. Here, cash decreases. Coutflows including interest) Bank loan Interest decreases Expenses quises.