Determining Financial. Statement Effects of Various Transactions
Wolverine World Wide. Inc. manufactures military, work, sport, and casual footwear and leather acces sories under a variety of brand names, such as Hush Puppies, Wolverine, and Bates, to a global market The following transactions occurred during a recent year. Dollars are in thousands.
a. Issued common stock to investors for $7.047 cash (example).
b. Purchased $765.472 of additional inventory on account.
c. Borrowed $59.500.
d. Sold SI .220,568 of products to customers on account: cost of the products sold was $734.547.
e. Paid cash dividends of $20.758.
f. Purchased for cash $24.126 in additional property, plant, and equipment.
g. Incurred $345.183 in selling expenses, paying three-fourths in cash and owing the rest on account.
h. Earned SI.757 interest on investments, receiving 90 percent in cash.
i. Incurred $2,850 in interest expense to be paid at the beginning of next year.
Required:
For each of the transactions, complete the tabulation, indicating the effect (+ for increase and - for decrease) of each transaction. (Remember that A = L + SE. R - E = NI. and NI affects SE through Retained Earnings. I Write NE if there is no effect. The first transaction is provided as an example.
| BALANCE SHEET. | INCOME STATEMENT. | ||||
Transaction. | Assets. | Liabilities. | Stockholders' Equity. | Revenues. | Expenses. | Net Income. |
(a) (example) | - 7.047 | NE | + 7.047 | NE | NE | NE |
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