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In: Accounting

Problem 1: For each of the transactions below, record whether it would result in an increase...

Problem 1:

For each of the transactions below, record whether it would result in an increase or decrease in assets and/or liabilities by placing an X in the appropriate boxes. Use the template provided to document your answers. An organization:

  1. Purchases supplies with cash
  2. Purchases supplies on account
  3. Takes out a loan
  4. Repays loan principal
  5. Receives payment on a pledge made by a donor
  6. Makes a payment on an amount it owes
  7. Prepays for insurance
  8. Pays employee wages that were earned by the employees
  9. Begins using office space with a 10-year lease for property

provide formulas

Problem 1
Assets Liabilities
Transaction Up Down Up Down
1. Purchases supplies with cash
2. Purchases supplies on account
3. Takes out a loan
4. Repays loan principal
5. Receives payment on a pledge
6. Makes a payment on an amount it owes
7. Prepays for insurance
8. Pays employees wages
9. Begins using office space with a 10-year lease for the property

Solutions

Expert Solution

Assets Liabilities
Transaction Up Down Up Down
1.Purchases supplies with cash   
   
       
   
   
   		 X X
2. Purchases supplies on account X X
3. Takes out a loan X X
4. Repays loan principal    X X
5. Receives payment on a pledge X X
6. Makes a payment on an amount it owes X X
7. Prepays for insurance X X
8. Pays employees wages    X X
9. Begins using office space with a 10-year lease for the property X X

ekkarill92 answered 2 years ago
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