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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.

  1. Owner invests cash into the business in exchange for stock.
  2. Recognizes account receivable for services provided.
  3. Pays account payable with cash.
  4. Buys land with cash.
  5. Buys plant equipment on credit.
  6. 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

Cash

Noncash assets

Total liabilities

Contributed capital

Retained earnings

Other equity

Statement of cash flows

Operating cash flow

Investing cash flow

Financing cash flow

Income statement

Revenues

Expenses

Net earnings

Statement of stockholders equity

Contributed capital

Retained earnings

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