E229B Learning Objective 4 Analyze the impact of business tr

E2-29B. (Learning Objective 4: Analyze the impact of business transactions on accounts)LO 4 The following selected events were experienced by either Bishop Industries, Inc., a corporation, or Kate Bishop, the major stockholder. State whether each event (1) increased, (2) decreased, or (3) had no effect on the total assets of the business. Identify any specific asset affected a. Sold land and received a note receivable of $43,000 (the land was carried on the company\'s books at $43,000) b. Received $140,000 cash and issued stock to a stockholder c. Purchased equipment for the business for $81,000 cash d. Received $37,000 cash from customers for services performed e. Purchased land for a building site for the business and signed a $98,000 promissory note to the bank. f. Earned $15,000 in revenue for services performed. The customer promises to pay Bishop Industries in one month. g. Paid $12,000 cash on accounts payable h. Purchased supplies on account for $4,000 i. Bishop used j. The business paid Bishop a cash dividend of $4,500 personal funds to purchase a pool table for her home.

Solution

Effect on Assets :

S.No.	Transaction	Effect on total assets
a.	Sold land and received a note receivable of $43000	No effect
b.	Received $140000 cash and issued stock to a stockholder	Increase
c	Purchase equipment for the business for $81000 cash	No effect
d	Received $37000 cash from customers for services performed	Increase
e	Purchase land for a building site for the business and signed a $98000 promissory note to the bank	Increase
f	Earned $15000 in revenue for service performed. The customer promises to pay bishop industries in one month	Increase
g	paid $12000 cash on account payable	Decrease
h	Purchase supplies on account for $4000	Increase
i	Bishop used personal funds to purchase a pool table for her home	No effect
j	The business paid bishop a cash dividend of $4500	Decrease