Can someone teach me how to answer the questions above? Frank\'s Balance Sheet •

Question

Can someone teach me how to answer the questions above?

Frank's Balance Sheet • Indicate the impact on assets, liabilities and equity of each of the following transactions by placing the dollar amounts of the impact (and a + or - sign to indicate its direction) in the appropriate box) • Example: Issued 10,000 shares of stock for $2 per share. Assets Liabilities Equities +20,000 +20,000 A. Borrowed $5,000 from State Bank. B. Purchased equipment, paying $3,000 cash. C. Purchased $8,000 of inventory on credit. Payment is due in 30 days. D. Sold inventory for $6,000 to customers, from whom payment is due in 30 days. The inventory cost Frank $4,000 E. Paid $7,000 cash to suppliers of inventory in partial fulfillment of amounts owed. F. Received $6,000 cash from customers for amounts owed by them. G. Declared an paid cash dividend of $2,000 to shareholders.

Explanation / Answer

Impact on assets, Liabilities and Equity: Particulars Assets - Liabilities = Equity A Borrowing from State Bank 5000 5000 Bank a/c         To Loan a/c B Purchase of Equipment for cash 3000 -3000 Equipment a/c         To Cash a/c C Purchase of inventory on credit 8000 8000 Inventory a/c        To Accounts payable a/c D Sale of inventory on credit 6000 2000 -4000 Accounts receivable a/c      To Inventory      To Profit & Loss a/c E Payment of cash to suppliers -7000 -7000 Accounts Payable a/c       To Cash a/c F Receipt of cash from customers 6000 -6000 Cash a/c       To Accounts Receivable a/c G Declared and paid dividend -2000 -2000 Dividend (Profit & Loss) a/c       To Cash a/c

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