The following transactions occurred during a recent year:

a. Issued stock to organizers for cash (example).

b. Borrowed cash from local bank.

c. Purchased equipment on credit.

d. Earned revenue, collected cash.

e. Incurred expenses, on credit.

/ Earned revenue, on credit.

g. Paid cash on account.

h. Incurred expenses, paid cash.

;'. Earned revenue, collected three-fourths in cash, balance on credit.

j. Experienced theft of $ 100 cash.

k. Declared and paid cash dividends.

/. Collected cash from customers on account.

m. Incurred expenses, paid four-fifths in cash, balance on credit.

n. Paid income tax expense for the period.

Required:

For each of the transactions, complete the tabulation, indicating the effect ( + for increase and — for decrease) of each transaction. (Remember that A = L + SE, R — E = NI, and NI affects SE through Retained Earnings.) Write NE if there is no effect. The first transaction is provided as an example.

Transcribed Image Text:

BALANCE SHEET INCOME STATEMENT Stock- Liabil- holders' Net Transaction Assets ities Equity Revenues Expenses Income (a) (example) + NE + NE NE NE