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For each of the following transactions, indicate how (i) net earnings and (ii) cash flows are affected. For each, state whether there will be an
For each of the following transactions, indicate how
(i) net earnings and (ii) cash flows are affected.
For each, state whether there will be an increase, decrease, or no effect, and the amount (if any)
Clearly specify the name and type of accounts that are affected in each transaction.
a. Received $150,000 from investors buying shares in the company. b. Bought land for $50,000. Paid half in cash, with the remainder to be paid in six months. c. Bought inventory costing $45,000, on account. d. Sold inventory costing $35,000 to customers, on account, for $52,000. e. Paid S1,000 of taxes that were owed from the previous period. f Borrowed $25,000 from a bank. The interest on the loan is 6% per year. g Depreciated equipment by $1,200. h. Paid $750 for supplies to be used in the future. i. Paid S250 to the power company for electricity used during the period. j. Declared and paid dividends of S8,000. a. Received $150,000 from investors buying shares in the company. b. Bought land for $50,000. Paid half in cash, with the remainder to be paid in six months. c. Bought inventory costing $45,000, on account. d. Sold inventory costing $35,000 to customers, on account, for $52,000. e. Paid S1,000 of taxes that were owed from the previous period. f Borrowed $25,000 from a bank. The interest on the loan is 6% per year. g Depreciated equipment by $1,200. h. Paid $750 for supplies to be used in the future. i. Paid S250 to the power company for electricity used during the period. j. Declared and paid dividends of S8,000Step by Step Solution
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