Ask Question
20 April, 10:51

During 2014, Comstock Company entered into the following transactions.

1. Purchased equipment for $286,176 cash.

2. Issued common stock to investors for $137,590 cash.

3. Purchased inventory of $68,480 on account.

Using the following tabular analysis, show the effect of each transaction on the accounting equation. Put explanations for changes to Stockholders' Equity in the right-hand margin. For Retained Earnings, use separate columns for Revenues, Expenses, and Dividends if necessary. Use Illustration3-3 as a model.

+2
Answers (1)
  1. 20 April, 14:32
    0
    1.

    Assets : Increase $286,176, Decrease $286,176

    Liabilities : No Effect

    Equity : No Effect

    2.

    Assets : Increase $137,590

    Liabilities : No Effect

    Equity : Increase $137,590

    3.

    Assets : Increase $68,480

    Liabilities : Increase $68,480

    Equity : No Effect

    Explanation:

    Purchase of equipment

    This will increase the assets of Equipment and decrease the Assets of Cash. No effect on the other elements of the Accounting Equation.

    Issuance of common stock

    This will increase the assets of cash and increase the shareholder's equity. No effect on liabilities

    Purchased inventory on Account.

    This will Increase the assets of inventory and also increase the assets of Accounts Payable. No effect on Equity
Know the Answer?
Not Sure About the Answer?
Get an answer to your question ✅ “During 2014, Comstock Company entered into the following transactions. 1. Purchased equipment for $286,176 cash. 2. Issued common stock to ...” in 📙 Business if there is no answer or all answers are wrong, use a search bar and try to find the answer among similar questions.
Search for Other Answers