Question
Consider the effects of the independent transactions, a through f, on a companys balance sheet, income statement, statement of cash flows, and statement of stockholders
Consider the effects of the independent transactions, a through f, on a companys balance sheet, income statement, statement of cash flows, and statement of stockholders equity.
- Owner invests cash into the business in exchange for stock.
- Recognizes account receivable for services provided.
- Pays account payable with cash.
- Buys land with cash.
- Buys plant equipment on credit.
- Borrows money by taking out loan at bank.
Complete the table below to explain the effects and financial statement linkages. Use + to indicate the account increases and to indicate the account decreases.
a. | b. | c. | d. | e. | f. | |
Balance sheet |
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Cash |
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Noncash assets |
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Total liabilities |
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Contributed capital |
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Retained earnings |
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Other equity |
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Statement of cash flows |
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Operating cash flow |
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Investing cash flow |
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Financing cash flow |
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Income statement |
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Revenues |
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Expenses |
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Net earnings |
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Statement of stockholders equity |
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Contributed capital |
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Retained earnings |
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