Purpose of Assignment Materials The purpose of this assignment is to help you be

Question

Purpose of Assignment Materials The purpose of this assignment is to help you become familiar with examining transactions and how it affects the balance sheet. Financial Accounting, Ch. 3: The Accounting Information System Assignment Steps Analyzing the Effect of Transactions Grading Guide Resources: Financial Accounting: Tools for Business Decision Making Week 2 Excel® Spreadsheet 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 oPurchased equ Use the Excef spreadsheet to record your answers and submit with your responses. Click the Assignment Files tab to submit your assignment.

Explanation / Answer

1. Assets increase due to cash incoming and also Stockholders' equity will be increased 2. Asset will be decreased due to cash decrease and also stockholders' equity will also decrease as it is an expense. 3. Both Asset and stockholders' equity will increase due to cash incoming and profit incurred 4. Both assets and stockholders' equity will increase due to increase in debtor and profit 5. Asset and stockholers' equity will be decreased due to decreasein cash and paying it to stockholders 6. Asset will be decreased due to cash decrease and also stockholders' equity will also decrease as it is an expense. 7. No effect on assets, it is only conversion of assets from debtor to cash 8. No effect on assets, it is only conversion of assets from cash to equipment 9. Both assets and liabilities will increase however no effect on stockholders' equity

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