The analytical framework used to evaluate transactions inreproduced below:
Cash + Non-cash Assets = Liabilities + Contributed Capital +Accumulated Other Comprehensive Income + Retained Earnings
Using this analytical framework, indicate the effect of each of the following transactions for Henderson Corporation:
1. Henderson sold merchandise for $225,000 on account, which costs $170,000 to manufacture.
2. Henderson purchased for cash $110,000 of raw materialinventory.
3. The company paid $25,000 in advance for an advertising campaignthat would be aired next year.
4. Henderson paid its employees $15,000 for the month.
5. The company purchased $7,000 of supplies on account.
6. Henderson issued $25,000 of long-term debt.
7. The company used $10,000 of excess cash to purchase marketablesecurities.
8. Henderson purchased a machine for $22,000 in cash.
9. At the end of the year Henderson paid dividends of $5,000.
10. At the end of the year the marketable securities that Henderson purchased in transaction 7 were now worth $11,500.
11. Depreciation for the period was $1,500.