PROBLEM SET AIdentify how each of the following separate tra

PROBLEM SET AIdentify how each of the following separate transactions 1 through 10 affects financial statements. For increases, place a \"+\" and the dollar amount in the column or columns. For decreases, place a\"-\"and the dollar amount in the column or columns. Some cells may contain both an increase (+) and a decrease (-) along with dollar amounts. The first transaction is completed as an example 1-1A Identifying effects of transactions on financial statements Required a. For the balance sheet, identify how each transaction affects total assets, total liabilities, and total eq- A1 P1 uity. For the income statement, identify how each transaction affects net income. b. For the statement of cash flows, identify how each transaction affects cash flows from operating ac- tivities, cash flows from investing activities, and cash flows from financing activities Income Statement Balance Sheet Statement of Cash Flows Total Income Operating Total Net Total Liab. Activities Activities 1Owner invests $900 cash in business +900 +900 in exchange for stock +900 2 Receives $700 cash for services provided 3 Pays $ 4 5 Incurs $100 legal costs on credit Purchases $200 of supplies on credit 6Buys equipment for $300 cash Pays $200 on accounts payable s $400 services on credit Pays $50 cash for dividends 9 10 Collects $400 cash on accounts receivable

Solution

Impact of each transaction :

+300

-300

+400

-400

		Balance Sheet	Income statement	Statement of cash flow
	Transaction	Total Assets	Total Liab.	Total equity	Net income	Operating activities	Investing activities	Financing activities
1	Owner invest $900 Cash in bussiness in exchange for stock	+900		+900				+900
2	Receive $700 Cash for service provided	+700		+700	+700	+700
3	Pay $500 cash for employee wages	-500		-500	-500	-500
4	Incur $100 legal cost on credit		+100	-100	-100
5	purchase $200 supplies on credit	+200	+200
6	Buy equipment for $300 Cash	+300 -300					-300
7	Pays $200 on account payable	-200	-200			-200
8	Provide $400 service on credit	+400		+400	+400
9	Pays $50 cash for dividend	-50		-50				-50
10	Collect $400 cash on account receivable	+400 -400				+400