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Unformatted text preview: Assets Liabilities Owner’s Equity Case 1 $125,000 $75,000 $50,000 Case 2 $400,000 $300,000 $100,000 Case 3 $415,000 $320,000 $95,000 Exercise 1-8 Classification of Financial Statement Items. Classify each of the following items according to (1) whether it belongs on the income statement (IS) or balance sheet (BS) and (2) whether it is a revenue (R), expense (E), asset (A), liability (L), or stockholders’ equity (SE) item. Item Appears on the Classified as Example: Cash BS A 1. Salaries expense IS E 2. Equipment BS A 3. Accounts payable BS L 4. Membership fees earned IS R 5. Capital stock BS SE 6. Accounts receivable BS A 7. Buildings BS A 8. Advertising expense IS E 9. Retained earnings BS SE...
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