Question 135127This question is from textbook Accounting: Concepts and Applications,
: For Practice 3-1 through 3-5, do the following for each transaction:
List the accounts impacted by the transaction.
For each account, indicate whether the transaction increased or decreased the account.
For each account, indicate how much the transaction increased or decreased the account.
Compute the impact of the transaction on total assets, total liabilities, and total owners' equity.
Practice 3-1 Impact of a Transaction
The company borrowed $125,000 in cash from Far West Bank.
Practice 3-2 Impact of a Transaction
The company used $45,000 in cash to purchase land on the west side of Hatu Lake.
Practice 3-3 Impact of a Transaction
The company used $30,000 in cash to repay a portion of its bank loan (see Practice 3-1). For simplicity, assume that there is no interest on the loan.
Practice 3-4 Impact of a Transaction
The company received $75,000 in cash as an additional investment by the stockholders (owners) of the company.
Practice 3-5 Impact of a Transaction
The company purchased a building for $100,000. The company paid $10,000 of the purchase price in cash and signed a mortgage contract obligating it to pay the remaining $90,000 over the next 10 years.
This question is from textbook Accounting: Concepts and Applications,
Answer by stanbon(75887)   (Show Source):
You can put this solution on YOUR website! List the accounts impacted by the transaction.
For each account, indicate whether the transaction increased or decreased the account.
For each account, indicate how much the transaction increased or decreased the account.
Compute the impact of the transaction on total assets, total liabilities, and total owners' equity.
Practice 3-1 Impact of a Transaction
The company borrowed $125,000 in cash from Far West Bank.
Impact: increased account by 125000
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Practice 3-2
The company used $45,000 in cash to purchase land on the west side of Hatu Lake.
Impact: decreased account by 45000
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Practice 3-3 Impact of a Transaction
The company used $30,000 in cash to repay a portion of its bank loan (see
Impact: decreased account by 30000
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Practice 3-1). For simplicity, assume that there is no interest on the loan.
????
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Practice 3-4 Impact of a Transaction
The company received $75,000 in cash as an additional investment by the stockholders (owners) of the company.
Impact: Increased account by 75000
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Practice 3-5 Impact of a Transaction
The company purchased a building for $100,000. The company paid $10,000 of the purchase price in cash and signed a mortgage contract obligating it to pay the remaining $90,000 over the next 10 years.
Impact: decreased account by 10000
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Comment:
That was a strange set of questions.
Cheers,
Stan H.
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