Using the format shown below, enter the S impact of each activity on the accounting equation. A=L +8 + REE . Also post the impact to Income
Statement equation. The ?rst item is provided as an example. (Decreases to account classi?cations should be entered as a negative.) The net increase
or decrease If the temporary revenue, expense and dividend accounts
should show as a chan- e to Retained Earnin ‘ h line. Assam = Liabilities + Stock + Retained Earnings Revenue ‘ Efpense ‘ li’v’dends ;
Retained Earnings Transaction Assets Liabilities Stock Retained Revenue Expense Dividends
Earning Example: Pay 51,000 for utilities in the current month 61,000.00 5 $1,000.00 $1,000.00 1 Issue common stock in exchange for cash, $15,000.
2 Obtain a loan from the bank for $9,000. 3 Receive cash of$l,200 in advance from customers.
4 Purchase supplies on account, $2,400 5 Pay one year ofrent in advance, $12,000. 6 Provide services to customers on account, $3,000.
7 Repayr $4,000 of the loan in (2) above. 8 Pay the full amount for supplies purchased in (4) above. 9 Provide services to customers in (3) above.
10 Pay cash dividends of $1,000 to stockholders.
Purchased $20,000 equipment paid $5,000 cash signed note
payable for rest,
12 Paid $2,000 for current month’s salary $0100 50-00 50-00 $000 50-00 50-00 50-00 Does your Balance Sheet Equation balance ‘? Assets = Liabilities +Stock +Retained Revenue —Expenses -Dividends =Retained
Earnings Earnings net
change in period
ScholarMatic: Explanation & Answer
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