Question
Q. 2 a. ABC Public Limited purchased plant and equipment through a down payment of cash of $ 2 million and signing a bond payable
Q. 2
a. ABC Public Limited purchased plant and equipment through a down payment of cash of $ 2 million and signing a bond payable of $ 8 million.
i. What will be the effect of this transaction on the following? (Note: Write I for Increase; D for Decrease and NE for No Effect in the following blanks) (5)
Income Statement | Balance Sheet | Cash Flow Statement | ||||||
Revenue | Expenses | Net Income | Assets | Liabilities | Owners Equity | *ICFs | *FCFs | *OCFs |
----------- |
----------- |
---------- |
--------- |
----------- |
----------- |
--------- |
--------- |
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*ICFs=Investing Cash Flows; FCFs=Financing Cash Flows & OCFs=Operating Cash Flows | ||||||||
ii. Prepare journal entry of the above transaction: (5) --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |
b. ABC Public Limited uses perpetual inventory system and sold goods costing $ 20 million for $ 30 million and received $ 22 million cash while rest of the sales is on account.
i. What will be the effect of this transaction on the following? (Note: Write I for Increase; D for Decrease and NE for No Effect in the following blanks) (5)
Income Statement | Balance Sheet | Cash Flow Statement | ||||||
Revenue | Expenses | Net Income | Assets | Liabilities | Owners Equity | *ICFs | *FCFs | *OCFs |
----------- |
----------- |
---------- |
--------- |
----------- |
----------- |
--------- |
--------- |
--------- |
*ICFs=Investing Cash Flows; FCFs=Financing Cash Flows & OCFs=Operating Cash Flows | ||||||||
ii. Prepare journal entry of the above transaction: (5) ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ |
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