Question

Following are transactions of Gone Tanners, Inc., a new company, during the month of January: 

Issued 10,000 shares of common stock for $15,000 cash. 

Purchased land for $12,000, signing a note payable for the full amount. 

Purchased office equipment for $1,200 cash. 

Received cash of $14,000 for services provided to customers during the month. 

Purchased $300 of office supplies on account. 

Paid employees $10,000 for their first month's salaries. 

How many of these transactions increased Gone's liabilities?

Answer 1

Transaction	Assets($)	Liabilities($)	Equity($)
1	15000		15000
2	12000	12000
3	no entry(w.n.)	-	-
4	14000		14000
5	300	300
6	(10000)		(10000)
Total	$31300	$12300	$19000

The Total liablities are $12300

working note:

Transaction 3 will not recorded because it will not affect the equation as increase in asset leads to decrease in another asset,hence it will not recorded.