For each of the events (a) though (c), perform transaction analysis and indicate the account name, amount, and direction of the effects (+ for increase and for decrease) on the accounting equation. (a) The Firm received cash by organizers and distributed to them 1,200 shares of $0.7 par value common stock with a market price of $20 per share. (b) The Firm purchased the stock of other companies as investments, paying $3,500 cash; of this, $1,500 was in short-term investments and the remaining was in long-term investments. (c) The Firm purchased $5,200 of equipment, paying $1,200 in cash and owing the rest on accounts payable to the manufacturer.

For each of the events (a) though (c), perform transaction analysis and indicate the account name, amount, and direction of the effects (+ for increase and for decrease) on the accounting equation. (a) The Firm received cash by organizers and distributed to them 1,200 shares of $0.7 par value common stock with a market price of $20 per share. (b) The Firm purchased the stock of other companies as investments, paying $3,500 cash; of this, $1,500 was in short-term investments and the remaining was in long-term investments. (c) The Firm purchased $5,200 of equipment, paying $1,200 in cash and owing the rest on accounts payable to the manufacturer.

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter16: Statement Of Cash Flows

Section: Chapter Questions

Problem 1EA: Provide journal entries to record each of the following transactions. For each, identify whether the...

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