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Unformatted text preview: Chapter 3 Homework Problems E3-6 Determining Financial Statement Effects of Various Transactions LO4 Wolverine World Wide, Inc., manufactures military, work, sport, and casual footwear and leather accessories under a variety of brand names, such as Hush Puppies, Wolverine, and Bates, to a global market. The following transactions occurred during a recent year. Dollars are in thousands. a. Issued common stock to investors for $7,059 cash (example). b. Purchased $778,472 of additional inventory on account. c. Borrowed $60,800. d. Sold $1,239,568 of products to customers on account; cost of the products sold was $745,547. e. Paid cash dividends of $21,458. f. Purchased for cash $25,026 in additional property, plant, and equipment. g. Incurred $345,984 in selling expenses, paying three-fourths in cash and owing the rest on account. h. Earned $1,760 interest on investments, receiving 90 percent in cash. i. Incurred $2,960 in interest expense to be paid at the beginning of next year. Required: For each of the transactions, complete the tabulation, indicating the effect (+ for increase and for decrease) of each transaction. (Remember that A = L + SE, R E = NI, and NI affects SE through Retained Earnings.) Select NE if there is no effect. The first transaction is provided as an example. E3-7 Recording Journal Entries LO4 Sysco, formed in 1969, is North Americas largest marketer and distributor of food service...
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This note was uploaded on 11/03/2011 for the course AEM 2210 at Cornell University (Engineering School).