A. Indicate the amount and effect (+ or -) of each transaction on total assets, total liabilites, and total stockholder's equity, and then compute the new totals for each category.
Assets = Liabilities + Stockholder's Equity
August 1, 2013 totals $350,000 $275,000 $75,000
August 3, borrowed $12,000 in cash from the bank + 12,000 + 12,000
New totals $362,000 $287,000 $75,000
August 7, bought merchandise inventory valued at $19,000 on account
New Totals
August 10, paid $7,000 cas for operating expenses
New Totals
August 14, received $50,000 in cash from sales of merchandise that had cost $33,000
New Totals
August 17, paid $14,000 owed pn accounts payable
New Totals
August 21, collected $17,000 of accounts receivable
New Totals
August 24, repaid $10,000 to the bank plus $200 interest
New Totals
August 29, paid Amy's furniture a cash divident of $5,000
New Totals
B. what was the amount of net income (or loss) during August? How much were total revenues and total expenses during August?
C. what were the net changes during the month of August in total assets, total liabilities, and total stockholder's equity?
D. explain to amy which transactions caused the net change in her stockholder's equity during August.
E. explain why dividend payments are not an expense, but interest is an expense.
F. explain why the money borrowed from the bank increased assets but did not increase net income.
G. explain why paying off accounts payable and collecting accounts receivable do not affect net income.