Sheridan Company made the following transactions: 1. Payment of a $185 invoice o

Question

Sheridan Company made the following transactions:

1. Payment of a $185 invoice on account.

2. Increase in the fair value of a Fair Value-Net Income Investment by $245.

3. Sale on account for $117.

4. Purchase of equipment paid for with $535 cash and a $1,090 note payable.

5. Increase in the fair value of a Fair Value-OCI Investment by $157.

6. Repayment of a $1,885 bank loan. Indicate the effect of each of the transactions on

(a) the basic accounting equation and

(choose from assets, liabilities, equity) (chose increase or decrese) (enter amount)

(b) the expanded basic accounting equation.

Explanation / Answer

A.

B.

1. Assets and Liablities Decrease $ 185 2. Assets Increase $ 245 3. Assets Increase $ 117 4. Assets and Liablities Increase $ 1,090 5. Assets Increase $ 157 6. Assets and Liablities Decrase $ 1,885

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