Problem 4-6 Ten transactions are listed below For each one, indicate t at s ecif

Question

Problem 4-6 Ten transactions are listed below For each one, indicate t at s ecific accounts arg a ected as vell as the direction increase o decrease of the effect. Als* i dicate whether the ransaction would increase or decekse both net ico e evenues minus expenses on the inco ve statement and net cas operations (opereting cash inflows minus operating cash outlows) on the statement of cash flows, Use the following key: increase (+), decrease (), and no effect (NE). The first one has been completed for you from Direction Net I Diection Net Income Mect operating . Issued ownership securities for cash. Cash Common Stock NE NE 2. Purchased invery an ccount. 3. Sold a servie on eccount. 4. Recelved cash payments from customers on previously recorded sales Purchased equlpment for cash. 6. Paid cash to reduce the salarics and wages payable accourm 8. Paid off a long-term note 9. Made a cash interest payment. 10. Sold land for an amount greater than its cost. Click if you would like to Show Work for this question: Open Show Work

Explanation / Answer

2. inventory and accounts payable, no effect in net income (ni) and cash flow (cf)

3. accounts rec. and sales, increase in NI and no change in CF

4. cash and accounts rec., no change in NI and increase in CF

5. equipment and cash, no change in NI and decrese in CF

6. salalries and wages payable and cash, no change in NI and decrese in CF
7. cash and service revenue account, increase in NI and CF both

8. long term note and cash, no change in NI and decrease in CF

9. Interest and cash, decrease in NI and CF both

10. cash, gain on sale of land and land, increase in NI and CF both

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