Description
Write a minimum 50 word response to each of the following scenarios describing the effect of each transaction on assets, liabilities, and stockholders' equity.
Selected transactions for Thyme Advertising Company, Inc.
- Issued common stock to investors in exchange for cash received from investors.
- Paid monthly rent.
- Received cash from customers when service was performed.
- Billed customers for services performed.
- Paid dividend to stockholders.
- Incurred advertising expense on account.
- Received cash from customers billed in (4).
- Purchased additional equipment for cash.
- Purchased equipment on account.
Use the Excel® spreadsheet to record your answers and submit with your responses.
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Explanation & Answer
Attached.
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As a result, this will affect both the assets and the stockholders’ equity. Thyme Advertising Company, Inc. assets will increase which is inform of cash in this scenario.
The stockholders’ equity will be affected and it will increase as well. The liability will not be affected because the scenario has nothing to do with liabilities.
Paid monthly rent will affect the company’s assets and the stockholders’ equity. Paid monthly rent is part of the Company’s expenses where the company has to
give out some cash. Therefore, the asset which will be affected in this case is cash which...
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