Quiz introduces the idea of tracking balance sheet and income statement effects of transactions using a matrix. This first step keeps things pretty simple. In subsequent videos, you will see this developed further into what I call the "Scorecard" and the textbook calls the "Fincial Statement Effects Template". You will be given beginning balances and 4 transactions. You are required to enter dollar amounts in a table of "fill in the blanks". The table has columns for assets, liabilities and shareholders' equity (S/E). The first row in the table is for beginnig balances; enter the numbers below into the correct column of the first row. Do NOT include $ signs, just numbers. Indicate negative numbers with a minus sign, not parentheses. Once you enter the beginning balances, the second row is for the first transaction below, third row for second transaction, etc. The last row of the table is for the 2016 ending balances, which should be the sum of each column if your answers are correct. You might want to prepare this in Excel and then type your answers in the quiz. You cannot copy and paste your answers from Excel or Word.

As an example, suppose the company paid $82 to its CEO as salary for 2016, and GAAP includes this amount in value creation in 2016. The proper answer for this transaction is -82 in the blank in the asset column, a 0 in the liability column, and -82 in the blank in the S/E column. You must enter 0 if a column is unaffected; an unfilled blank will be counted as incorrect.

Instructions

The CHS Co. started 2016 with $760 of assets, $320 of liabilities, and $440 of shareholders' equity. During the year, the followsing transactions happened in 2016:

CHS borrowed $60 of cash from their bank. CHS is obligated to pay the $60 back to the bank in 2017.	$60
CHS declared and paid $15 of dividends to shareholders during 2016.	$15
During 2016, CHS's activities created an obligation to pay the city where it is located $40 in fees in 2017. GAAP requires CHS to include the fees in measuring value creation in 2016, not in 2017.	$40
During 2016, customers paid CHS $110 in cash for services rendered. GAAP requires CHS to include the cash received in measuring value creation in 2016.	$110

Use these facts to complete the following table. If a transaction does not affect a particular column, enter 0.

QUESTION 1

1. Use the details in the instructions to complete this table.

   	Assets	Liabilities	S/E
   Beginning balances
   Borrowed money
   Declared and paid dividends
   Obligation for fees to city
   Cash received from customers
   Ending balances

Could you explain answers