Effects of Transactions on Elements of the Accounting Equation
Some

question 74

Essay

Effects of transactions on elements of the accounting equation
Some of the transactions carried out by Tudor Wholesale during the first month of the company's existence are listed below. You are to determine the effect of each transaction on the total assets, the total liabilities, and the equity. Prepare your answer in columnar form, identifying each transaction by letter and using the symbols (+) for increase, (-) for decrease, and (NC) for no change. An answer is provided for the first transaction to serve as an example.
$$\begin{array} { | l | c | c | c | } \hline{ \text { Trarsactions } } & \text { Assets } & \begin{array} { c } \text { Total } \\\text { Liabilities }\end{array} & \text { Equity } \\\hline \text { A Issued share capital in excharge for cash } & + & \text { NC } & + \\\hline \begin{array} { l } \text { B. Bought lard ard a building at a total price } \\\text { of } \$ 165,000 \text {. Made a down paynent of } \\\$ 65,000 \text { cash and signed a note payable for the } \\\text { balance. }\end{array} & & & \\\hline \begin{array} { l } \text { C. Bough adjoining lot for use as parking lot; } \\\text { paid cash in full }\end{array} & & & \\\hline \begin{array} { l } \text { D. Sold a portion of the land on credit at a } \\\text { price equal to its cost. }\end{array} & & & \\\hline \text { E. Obtained a loars from a barik } & & & \\\hline \begin{array} { l } \text { F. Purchased office equipment on credit. } \\\end{array} & & & \\\hline \begin{array} { l } \text { G. Paid a liability. } \end{array} & & & \\\hline \begin{array} { l } \text { H. Collected part of arnount owned to the } \\\text { business from purchaser of land. }\end{array} & & & \\\hline \begin{array} { l } \text { I. Sold arnother portion of the larnd for cash at a } \\\text { price in excess of cost. }\end{array} & & & \\\hline\end{array}$$

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Definitions:

Corporate Bylaws

Formal rules and regulations adopted by a corporation to govern its operations and management.

Indenture Contract

A formal agreement between a bond issuer and the bondholders, specifying the terms of the bond such as the interest rate, maturity date, and other obligations.

Articles of Incorporation

A document filed with a state or governmental body to legally document the creation of a corporation.

Provincial Tax Agreement

An accord between provinces or between the federal and provincial governments regarding the collection and distribution of taxes.