Resources: Financial Accounting: Tools for Business Decision Making
Write a minimum 150-word response to each of the following scenarios from Exercise E3-1 in Financial Accounting (p. 132) describing the effect of each transaction on assets, liabilities, and stockholder's equity:
Selected transactions for Thyme Advertising Company, Inc.
o Issued common stock to investors in exchange for cash received from investors.
o Paid monthly rent.
o Received cash from customers when service was performed.
o Billed customers for services performed.
o Paid dividend to stockholders.
o Incurred advertising expense on account.
o Received cash from customers billed in (4).
o Purchased additional equipment for cash.
o Purchased equipment on account.
Use the Excel spreadsheet to record your answers and submit with your responses.
E 3-1 Transactions made by Mickelson Co. for the month of March are shown below. Prepare a tabular analysis that shows the effects of these transactions on the expanded accounting equation.
1. The company performed $20,000 of services for customers on account.
2. The company received $20,000 in cash from customers who had been billed for services [in transaction (1)].
3. The company received a bill for $1,800 of advertising but will not pay it until a later date.
4. Mickelson Co. paid a cash dividend of $3,000.
Identify normal balances.