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WhatsApp Image 2019-07-29 at 5.03.33 PM (1).jpeg - Chapter...

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Unformatted text preview: Chapter 02 - Investing and Financing Decisions and the Accounting System HANDOUT 2 - 1 ANALYZING TRANSACTIONS Analyze each of the following transactions of World Wide Webster by performing each of the following steps. Then, use the chart on the following page to (1) keep track of the amount in each account and (2) ensure the accounting equation is in balance. (a) Stockholder invests $10,000 into the business in exchange for 10,000 shares of $1 par value common stock. 1. Decide if a transaction took place. Yes itry required 2. Identify the accounts affected. Cash and common stock 3. Classify each account affected. stockholders equity common 4. Identify direction and amount. Cash (A) + 10, DOUS Commonshod (56)+ 10, 500 5. Ensure the accounting equation is in balance. yes 10 (b) Borrow $15,000 signing a note payable to the bank that is due in three months. - 1. Decide if a transaction took place. 2. Identify the accounts affected. Cash and notes payable 3. Classify cach account affected. Cash Asset ) and Notes payable Light. 4. Identify direction and amount. $15, 100 = 8150DO 5. Ensure the accounting equation is in balance. (c) Acquire a $15,000 truck and $5,000 worth of equipment. 1. Decide if a transaction took place. 4 5 2. Identify the accounts affected. Cash and equipment 3. Classify each account affected. Assest Asset 4. Identify direction and amount. 20,000 = 15, 000 + 5, 000 5. Ensure the accounting equation is in balance. 2-5 C 2017 by MeGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part first cla que or distribution in any on a website, in whole of part...
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  • Fall '12
  • MayYueZhang
  • DOUS Commonshod

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