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?
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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