Question

Evaluate each of the following transactions in terms of their effect on assets, liabilities, and equity....

Evaluate each of the following transactions in terms of their effect on assets, liabilities, and equity.

1. Buy $15,000 worth of manufacturing supplies on credit
2. Issue $85,000 in stock
3. Borrow $63,000 from a bank
4. Pay $5,000 owed to a supplier
5. Receive payment of $12,000 owed by a customer
6. Purchase equipment for $44,000 in cash
7. Pay $7,000 owed to a supplier

What is the net change in Total Liabilities?

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Answer #1

Net change in Total Liabilities= $66,000

Working

Transaction affect Liabilities Amount
1. Buy $15,000 worth of manufacturing supplies on credit Yes $    15,000
2. Issue $85,000 in stock No
3. Borrow $63,000 from a bank Yes $    63,000
4. Pay $5,000 owed to a supplier Yes $    (5,000)
5. Receive payment of $12,000 owed by a customer No
6. Purchase equipment for $44,000 in cash No
7. Pay $7,000 owed to a supplier Yes $    (7,000)
Total change in Liabilities $    66,000
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