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  3. 1.(8 points) for each item demonstrated on the fin

1.(8 points) For each item demonstrated on the Financial Statement Effects Template, describe the simplest,...

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Accounting

1.(8 points) For each item demonstrated on the Financial Statement Effects Template, describe the simplest,
most likely transaction that would have that effect. Be sure to mention the reason for all the relevant items.
($ thousands) Balance Sheet Income Statement
Transaction Cash
Asset + Noncash
Assets = Liabil-
ities + Contrib.
Capital + Earned
Capital
Rev-
enues Expen-ses = Net
Income
a)-4,800=-4,320
(Loan)
-480
(Retained
Earnings)
+480
(Interest
Expense)
=-480
b)-30,000=
-1,000
(Common
Stock)
-29,000
(APIC)
=
c)-24,000+24,000
(Equipment)==
d)-20,400=-20,400
(A/P)=
e)+78,000=+78,000
(Loan)=
f)+30,000
(Inventory)=+30,000
(A/P)=
g)
+33,900
(A/R)
-15,000
(Inventory)
=
+18,900
(Retained
Earnings)
+33,900
(Sales)
+15,000
(Cost of
Goods
Sold)
=+18,900
APIC = Additional Paid in Capital, Excess of Par A/P = Accounts Payable A/R = Accounts Receivable
a.
b.
c.
d.
e.
f.
g.

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