Explain briefly how each of the following transactions would affect a company’s balance sheet. (Remember, assets must equal liabilities plus owners’ equity before and after the transaction.)
a. Sale of used equipment with a book value of $300,000 for $500,000cash.
b. Purchase of a new $80 million building, financed 40 percent with cash and 60 percent with a bank loan.
c. Purchase of a new building for $60 million cash.
d. A $40,000 payment to trade creditors.
e. A firm’s repurchase of 10,000 shares of its own stock at a price of $24 per share.
f. Sale of merchandise for $80,000 in cash.
g. Sale of merchandise for $120,000 on credit.
h. Dividend payment to shareholders of $50,000.