become familiar with examining transactions and how it affects the balance sheet

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1fninaanu

Business Finance

Description

Write a minimum 100-word response to each of the following scenarios from Exercise E3-1 in Financial Accounting (p. 132) describing the effect of each transaction on assets, liabilities, and stockholder's equity (this means that your answer to each transaction must be in 100 words):

  • 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

I am working on getting the link to pg 132

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Running head: EXAMINING TRANSACTIONS.

EXAMINING TRANSACTIONS
NAME
INSTITUTION
LECTURER

1

EXAMINING TRANSACTIONS

2

When a company offers common stock, it entitles the buyers of the shares to dividends of
varying amounts that depend on the profitability of the enterprise (Van Horne, 2014). Purchasers
of common stock attain a degree of ownership in the company. Common stockholders have the
least priority in the enterprise. They can only access the assets of the company after debtholders,
and preferred shareholders have had their access. When a company issues common stock, it
credits the common stock. When issuing common stock, a company raises revenue. They debit
this amount in the cash account. Thus, the company increases its assets through cash and also
increases its owners’ equity.
Businesses that do not have their premises have to pay monthly rent. They hire buildings
to carry out their operations (Dilger & Manuel, 2012). Rent is an expense. It has an impact on a
company’s books of accounts. When a business pays monthly rent, it credits the transaction in
the cash account and debits the rent expense. Crediting cash reduces the business’ current assets.
This reduction is because the ...


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