Identify how each of the following separate transactions affects financial statements. For the balance sheet, identify how each transaction affects total assets, total liabilities, and total equity. For the income statement, identify how each transaction affects net income. For the statement of cash flows, identify how each transaction affects cash flows from operating activities, cash flows from financing activities, and cash flows from investing activities. For increases, place a “+” in the column or columns. For decreases, place a “–” in the column or columns. If both an increase and a decrease occur, place “+/–” in the column or columns. The first transaction is completed as an example.
The following financial statement information is from five separate companies.
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| Balance Sheet | Income Statement | Statement of Cash Flows | |||||
| Transaction | Total Assets | Total Liab. | Total Equity | Net Income | Operating Activities | Financing Activities | Investing Activities | |
1 | Owner invests cash for stock | + |
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2 | Buys building by signing note payable |
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3 | Pays cash for salaries incurred |
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4 | Provides services for cash |
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5 | Pays cash for rent incurred |
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6 | Incurs utilities costs on credit |
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7 | Buys store equipment for cash |
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8 | Pays cash dividend |
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9 | Provides services on credit |
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10 | Collects cash on receivable from (9) |
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