Transcribed Image Text
Explain briefly how each of the following transactions wouldaffect a company’s balance sheet. Remember, assets must equalliabilities plus owners’ equity before and after thetransaction.a) Sale of used equipment with a book value of $300,000 for$500,000 cash.b) Purchase of a new $80 million building, financed 40 percentwith cash and 60 percent with a bank loan.c) Purchase of a new building for $60 million cash.d) A $40,000 payment to trade creditors.e) A firm’s repurchase of 10,000 shares of its own stock at aprice of $24 per share.f) Sale of merchandise for $80,000 in cash.g) Sale of merchandise for $120,000 on credit.h) Dividend payment to shareholders of $50,000
Other questions asked by students
Physics
Psychology
General Management
Finance