E2-6

E2-8

E2-10

and IL DILS CIC d. Stockholders' equiry, as of December 31, 2018, assuming that assets increased by and liabilities decreased by $75,000 during 20YB. e. Net Income (or net loss) during 2048, assuming that as of December 31, 20YA... $1,275.000, liabilities were $290,000, and there were no dividends and no addition mon stock was issued. Obj. 2,4 E2-6 Effects of transactions on stockholders' equity For Target Corporation (TGT), indicate whether the following transactions would (1) (2) decrease, or (3) have no effect on stockholders' equity. 1. Borrowed money from the bank. b. Paid creditors. c. Made cash sales to customers. d. Purchased store equipment e. Pald dividends. f. Paid store rent g. Pald interest expense. h. Sold store equipment at a gain. i. Received interest revenue. i Pald taxes. - 1,2,4 E2-7 Effects of transactions on accounting equation Describe how the following business transactions affect the three elements of the account ing equation a. Received cash for services performed. b. Paid for utilities used in the business. c. Borrowed cash at local bank. d. Issued common stock for cash. e. Purchased land for cash. 1, 2,4 Assets sed by E2-8 Effects of transactions on accounting equation A vacant lot acquired for $500,000, on which there is a balance owed of $300,000, is sold for $660,000 in cash. The seller pays the $300,000 owed. What is the effect of these trans actions on the total amount of the seller's (1) assets, (2) liabilities, and (3) stockholders equity? E2-9 Effects of transactions on stockholders' equity Indicate whether each of the following types of transactions will (a) increase stockholders equity or (b) decrease stockholders' equity. a. Issued common stock for cash. b. Received cash for fees earned. c. Paid cash for utilities expense. d. Paid cash for rent expense. e. Paid cash dividends. Chapter 2 Basic Accounting Systems Cash Basis E2-10 Effects of transactions on accounting equation On Time Delivery Service had the following selected transactions during November 1. Received cash from issuance of common stock, $75,000 2. Paid rent for November, $5,000. 3. Paid advertising expense, $3,000. 4. Received cash for providing delivery services, $34,500. 5. Borrowed $10,000 from Second National Bank to finance its operations. 6. Purchased a delivery van for cash, $25,000. 7. Paid interest on note from Second National Bank, $75. 8. Paid salaries and wages for November, $10,000. 9. Paid dividends, $2,000. Indicate the effect of each transaction on the accounting equation by listing the numbers identifying the transactions, (1) through (9), in a vertical column, and inserting at the right of each number the appropriate letter from the following list: a. Increase in an asset, decrease in another asset. b. Increase in an asset, increase in a liability. c. Increase in an asset, increase in stockholders' equity. d. Decrease in an asset, decrease in a liability. e. Decrease in an asset, decrease in stockholders' equity