Question

For each of the following transactions indicate how they impact the following Financial Statements

• Income statement

A.Owner contributes cash to finance the company’s growth

B. Company closes on a bank loan to purchase new equipment

C. Company pays rent expense to landlord

D. Company bills client for work in progress

E. Company collects outstanding accounts receivable

F. Company records invoices for materials delivered to jobsite

  G. Company pays accounts payable balance to material supplier

H. Company allocates insurance expenses to job costs

I. Owners take a distribution to pay personal income taxes

J. Company charges overhead payroll to job cost

Answer 1

Answer-

event	Impact on Balance sheet	Income statement
A	Increases owners equity and increases cash	no impact
B	Increases liabilities long term debt, increases assets by increasing cash balance	no impact
C	Decreases owners equity, decreases assets inform of cash balance	increses expenses
D	Increases owners equity, increases assets in form of accounts receivable	increases revenue
E	No impact (since asset in form of cash increases and in form of accounts receivable decreases)	no impact
F	Increases liabilities inform of accounts payable, increases inventories in form of raw materials	no impact
G	Decreases liabilities in form of accounts payable, decreases cash balance	no impact
H	Increases assets by increasing work in process value	Increases expenses
I	Decreses owners equity, decreases assets in form of cash balance	no impact
J	increases assets by increasing work in process inventory value	Increases expenses