2293 Chapter 2 question 2-38 Solution 292[1]

2293 Chapter 2 question 2-38 Solution 292[1] - 2-38 a...

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2-38 a) Assets = Liabilities + Shareholders’ Equity 1. +$450,000 (cash) = + +$450,000 (common shares) 2. +$50,000 (land) +$150,000 (building) -$50,000 (cash) + +$150,000 (common shares) 3. +$24,000 (cash) = +$6,000 (unearned rent) + +$18,000 [retained earnings (rental revenue)] 4a +$100,000 (equipment) -$60,000 (cash) = +$40,000 (notes payable) 4b = +$2,000 (interest payable) + -$2,000* [retained earnings (interest expense)] 5. +$225,000 (inventory) = +$225,000 (accounts payable) 6. +$75,000 (cash) +$200,000 (accounts receivable) = + $275,000 [retained earnings (sales revenue)] 7. -$180,000 (inventory) = + -$180,000 [retained earnings (cost of goods sold)]
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