Ask Question
14 July, 06:11

Describe the effect of each transaction on assets, liabilities, and stockholders' equity. Issued common stock to investors in exchange for cash received from investors.

Paid monthly rent.

Received cash from customers when service was performed.

Billed customers for services performed.

+2
Answers (1)
  1. 14 July, 09:38
    0
    Issued Common Stock to Investors in exchange for Cash received from investors

    Stockholders Equity = Increase

    Assets = Increase

    Liabilities = No Effect

    Paid Monthly Rent

    Assets = Decrease

    Stockholders equity = Decrease

    Liabilities = No Effect

    Received cash from customers when service is performed

    Assets = Increase

    Stockholders Equity = Increase

    Liabilities = No Effect

    Billed Customers when service is performed

    Assets = Increase

    Liabilities = No Effect

    Stockholders Equity = Increase

    Explanation:

    Issued Common Stock to Investors in exchange for Cash received from investors

    Stockholders Equity increase due to increase in issue of additional common stock.

    Assets increase due to inflow of asset of Cash resulting from the issue.

    Paid Monthly Rent

    Stockholders equity decrease due to increase in an expense item (Rent) which decreases profits attributable to stockholders.

    Assets decrease due to outflow of economic benefits in form of cash.

    Received cash from customers when service is performed

    Shareholders Equity increase increase due to inflow of economic benefits in form of revenue, which would consequently increase profit attributable to shareholders.

    Assets are increasing due to inflow of economic benefits in form of cash.

    Billed Customers when service is performed

    Assets are increasing due to increase of future economic benefit in form of Accounts Receivable.

    Shareholders Equity increase increase due to inflow of economic benefits in form of revenue, which would consequently increase profit attributable to shareholders.
Know the Answer?
Not Sure About the Answer?
Find an answer to your question ✅ “Describe the effect of each transaction on assets, liabilities, and stockholders' equity. Issued common stock to investors in exchange for ...” in 📘 Business if you're in doubt about the correctness of the answers or there's no answer, then try to use the smart search and find answers to the similar questions.
Search for Other Answers