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Chapter 3 Homework

# Chapter 3 Homework - Accounting 151 Section 16 Patrick...

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Accounting 151 Section 16 Patrick Leblond 09/12/06 Chapter 3 Problems E4: a) 1) The company issued \$15,000 worth of stock, thereby increasing both assets and stockholders’ equity by that sum. 2) The company bought \$5000 of office equipment, paying \$1000 in cash, and the remaining \$4000 on credit. The company assets therefore increased by \$4000, as did the liabilities. 3) The company bought \$750 of supplies and paid cash, causing the total assets to remain unchanged. 4) The company had \$7,800 of service revenue, of which \$4,400 was cash and the remaining \$3,400 as a future payment. The assets and stockholders’ equity thus both increase \$7,800. 5) The company used \$1,500 in cash to pay of outstanding debt. Both the assets and the liabilities will decrease by that amount. 6) The company paid out \$2,000 in dividends using cash. Both the assets and stockholders’ equity will decrease by that amount. 7) The company paid \$800 of rent using cash. Both the assets and the stockholders’ equity will decrease by that amount. 8) The company received \$450 dollars of future payments early. The resulting changes in the cash and accounts receivables accounts offset each other, leaving the total assets unchanged.

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Chapter 3 Homework - Accounting 151 Section 16 Patrick...

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