For each of the events (a) through (). perform transaction analysis and indicate

Question

For each of the events (a) through (). perform transaction analysis and indicate the account amount, and direction of the effect (+for increase and-for decrease) on the accounting equation. Check that the accounting equation remains in balance after each transaction. (If no impact on the accounting equation leave cells blank. Enter your answers in millions) EootCovers, Inc., with headquarters in Beaverton, Oregon, is one of the world's leading manufacturers of athletic shoes and sports apparel. The following activities occurred during a recent year. The amounts are rounded to millions. a. Purchased additional buildings for $188 and equipment for $260; paid $404 in cash and signed a long-term note for the rest b. Issued 110 shares of $2 par value common stock for $335 cash c. Declared $140 in dividends to be paid in the following year d. Purchased additional short-term investments for $7,816 cash. e. Several EootCovers investors sold their own stock to other investors on the stock exchange for $82 f. Sold $4,313 in short-term investments for $4,313 in cash. Transaction Assets Liabilities Stockholder A. B. C.

Explanation / Answer

Transaction   Assets Amount ($m) = Liabilities Amount ($m) + Stockholder's equity Amount ($m) (a) Purchased additional buildings & Additional buildings 188 Equipment Equipment 260 Paid cash Cash -404 Long term note payable Long term notes payable 44 Total 44 = 44 + (b) Shares issued for cash Cash 335 Common Stock 220 Share Premium 115 Total 379 = 44 + 335 c ) Dividends declared Dividend payable 140 Dividends -140.00 Total 379 = 184 + 195 d) Additional short term investements purchased Investments 7816 Cash -7816 Total   379 = 184 + 195 e) Stock sold & purchased by other investors Total 379 = 184 + 195 f) Sold short term investments Short term investments -4313 Cash 4313 Total 379 184 + 195

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