Questions 810 of 10 Y Save Exit Submit Rawico Communication

Questions 8-10 (of 10) Y Save & Exit ||Submit Rawico Communications operates 15 radio stations throughout the West. The following events occured during September. a. Placed an order for office supplies costing $2,400. Supplier intends to deliver later in the month. b. Purchased equipment that cost $29,000; paid $18,000 cash and signed a promissory note to pay $11,000 in one month. c. Negotiated and signed a one-year bank loan, and then deposited $6,000 cash in the company\'s checking account d. Hired a new finance manager on the last day of the month. e. Received an investment of $9,000 cash from the company\'s owners in exchange for issuing common shares. f Supplies [ordered in (a)] were received, along with a bill for $2,400.

Solution

Effect of each transaction on Accounting equation (Amount in $)

Working Notes:-

1) In point a) there is no transaction as only order is placed with the supplier

2) Hiring of new finance manager on the last day of month does not affect the accounting equation.

	Assets		=	Liabilities		+	Stockholder\'s Equity
a.
b.	Equipment	29,000		Promissory Notes	11,000
	Cash	-18,000
c.	Bank	6,000		Bank Loan	6,000
d.
e.	Cash	9,000					Common Shares	9,000
f.	Supplies	2,400		Accounts Payable	2,400
	Totals	28,400	=		19,400	+		9,000