E2-21 - i Paid officer salaries j Paid taxes k Paid off...

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ACC 305 / 7190 02/07/2011 Describe how the following transactions of Sun Microsystems, Inc. would affect the three elements of the accounting equation. a. Paid research and development expenses for the current year. b. Purchased machinery and equipment for cash. c. Received cash from issuing stock. d. Received cash from the issuance of long-term debt. e. Made cash sales. f. Paid selling expenses. g. Paid employee pension expenses for the current year. h. Received proceeds from selling a portion of manufacturing operations for a gain on the sale.
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Unformatted text preview: i. Paid officer salaries. j. Paid taxes. k. Paid off long-term debt. l. Paid dividends. Solution: a) Decrease equity, Decrease Assets b) Increase assets, Decrease assets. Net increase is zero. c) Increase Assets, Increase Equity d) Increase Assets, Increase Liabilities e) Increase Assets, Increase Equity f) Decrease Equity, Decrease Assets g) Decrease Equity, Decrease Assets h) Increase Assets, Increase Equity i) Decrease Equity, Decrease Assets j) Decrease Liabilities, Decrease Assets k) Decrease Liabilities, Decrease Cash l) Decrease Equity, Decrease Assets...
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