Determining financial statement effects

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Determining Financial Statement Effects of Several Transactions The following events occurred for Favata Company: a. Received $10,000 cash from owners and issued stock to them. b. Borrowed $7,000 cash from a bank and signed a note due later this year. c. Bought and received $800 of equipment on account. d. Purchased land for $12,000; paid $1,000 in cash and signed a long-term note for $11,000. e. Purchased $3,000 of equipment; paid $1,000 in cash and charged the rest on account. LO 2-1, 2-2 Final PDF to printer CHAPTER 2 The Balance Sheet 83 phi71385_ch02_046-095.indd 83 10/05/20 08:28 PM Required: For each of the events (a) through (e), perform transaction analysis and indicate the account, amount, and direction of the effect (+ for increase and - for decrease) on the accounting equation. Check that the accounting equation remains in balance after each transaction. Use the following headings: Event Assets = Liabilities + Stockholders' Equity

 

 

Reference no: EM133233722

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