Question

Problem Set B, located at the end of Problem Set A, is provided for each problem to reinforce the learning process, i mulluus ale SIU.000. Un August 4. Lola lupuit following SASB guidelines. Investors react positively to this report. On August 5, a new investor contributes $3,000 cash and $7,000 in equipment in exchange for Lola stock. After the investment, what is the amount of equity for Lola? connect Identify how each of the following separate transactions 1 through 10 affects financial statements. For increases, place a "+" and the dollar amount in the column or columns. For decreases, place a "-" and the dollar amount in the column or columns. Some cells may contain both an increase (+) and a decrease (-) along with dollar amounts. The first transaction is completed as an example. Required a. For the balance sheet, identify how each transaction affects total assets, total liabilities, and total eq- uity. For the income statement, identify how each transaction affects net income. b. For the statement of cash flows, identify how each transaction affects cash flows from operating ac- tivities, cash flows from investing activities, and cash flows from financing activities. PROBLEM SET A Problem 1-1A Identifying effects of transactions on financial statements A1 P1 Π Balance Sheet Income Statement Statement of Cash Flows Transaction Total Assets Tota! Llab. Total Equity Net Income Operating Activities Investing Activities Financing Activities + 900 +900 Owner invests $900 cash in business in exchange for stock Receives $700 cash for services provided 3 Pays $500 cash for employee wages 41 Buys $100 of equipment on credit 51 Purchases $200 of supplies on credit Buys equipment for $300 cash 7 Pays $200 on accounts payable Provides $400 services on credit 9 Pays $50 cash for dividends 10 Collects $400 cash on accounts receivable The following financial statement information is from five separate companies. Problem 1-2A Computing missing

Answer 1

b. Balance sheet Income statement Statement of cash flows Total liabilities Total Equity Net income Operating activites Investing activities Financing activities Transactions Total Assets 1. Owner invests $900 cash in business in exchange of stock (+)900 (+)900 (+) 900 (+) 700 (-)500 (+)700 (-)500 (+) 700 (-)500 (+)100 (+) 100 (+) 200 2. Receives $700 cash for services provided 3. Pays $500 cash for employee wages 4. Buys $100 equipment on credit 5. Purchases $200 supplies on credit 6. Buys equipment for $300 cash 7. Pays $200 on accounts payable 8. Provides $400 services on credit 9. Pays $50 cash for dividens 10. Collects $400 cash on accounts receivable (+)700 (-)500 (+)100 (+)200 (+)300, (-) 300 (-)200 (+)400 (-)50 (+)400, (-)400 (-)300 (-)200 (-)200 (+)400 (-)50 (+)400 (-)50 (-)50 (+)400