2.2

Transaction Analysis and Business Activities. The accountant for Compton Inc. has collected the following information: a. Compton purchased a tract of land from Jacobsen Real Estate for $974,000 cash. b. Compton issued 2,000 shares of its common stock to George Micros in exchange for $120,000 cash. c. Compton purchased a John Deere tractor for $53,000 on credit. d. Michael Rotunno paid Compton $8,100 cash for services performed. The services had been performed by Compton several months ago for a total price of $11,000 of which Rotunno had previously paid $2,900. e. Compton paid its monthly payroll by issuing checks totaling $32,050. f. Compton declared and paid its annual dividend of $7,000cash. Required: 1. Prepare an analysis of the effects of these transactions on the accounting equation of the business. Use the format below. If an amount box does not require an entry, leave it blank. Enter decreases in account values as negative numbers. If the elfect of a transaction is to increase AND decrease the sarme item (i.e. Asset, Wability), enter "o" since the net effect on the item is zero. 2. Indicate whether the transaction is a financing, investing, or operating activity. a. Compton purchased a tract of land from Jacobsen Real Estate for $974,000 cash. b. Compton issued 2,000 shares of its common stock to George Micros in exchange for $120,000 cash. C. Compton purchased a John Deere tractor for $53,000 on credit. d. Michael Rotunno paid Compton $8,100 cash for services performed. The services had been performed by Compton several months ago for a total price of $11,000 which Rotunno had previously paid $2,900. c. Compton paid its monthly payroll by issuing checks totaling $32,050. f. Compton declared and paid its annkal dividend of $7,000 cash