Effect of recording errors on the balance sheet equation. Using the notation 0/S

(overstated). U/S (understated), or No (no effect), indicate the effects on assets, liabilities, and shareholders' equity of failing to record each of the following independent transactions or events. For example, a failure to record the issuance of common stock for $10,000 cash would be shown as follows:

Assets—U/S $10,000 Liabilities—No Shareholders' equity—U/S $10,000

(1) A firm purchases merchandise costing $8,000 on account.

(2) A firm acquires a machine costing $20,000. It makes a 25 percent down payment, with the remainder payable over four years.

(3) A firm places an order for $5,500 of merchandise with a supplier.

(4) A firm receives a check for $600 from a customer for merchandise to be delivered next month.

(5) A firm issues a check for $1,200 to cover rental of a warehouse for the next two months.

(6) A firm issues common stock with a market value of $2,500 in the acquisition of a patent.
(7) A firm pays a note payable for $4,000. The note had previously been con-ectly recorded on the books in the amount of $4,000.
(8) A firm pays $5,000 for an option to purchase a tract of land. The price of the land is $40,000. The firm can exercise the option within 90 days.