151. Ramierez Company received its first electric bill in the amount of $60 which will be paid next month. How will this transaction affect the accounting equation?
152. Simpson Auto Body Repair purchased $20,000 of machinery. The company paid $8,000 in cash at the time of the purchase and signed a promissory note for the remainder to be paid in four monthly installments.
(a) How will the purchase affect the accounting equation?
(b) How will the payment of the first monthly installment affect the accounting equation?
153. On July 1 of the current year, the assets and liabilities of John Wong, DVM, Inc., are as follows: Cash, $15,000; Accounts Receivable, $12,300; Supplies, $3,100; Land, $35,000; Accounts Payable, $8,700. What is the amount of stockholders’ equity as of July 1 of the current year?
154. Indicate how the following transactions affect the accounting equation:
(a) The purchase of supplies on account.
(b) The purchase of supplies for cash.
(c) Cash dividends paid to stockholders.
(d) Revenues received in cash.
(e) Revenues received on account.
155. a. A vacant lot acquired for $83,000 cash is sold for $127,000 in cash. What is the effect of the sale on the total amount of the seller’s (1) assets, (2) liabilities, and (3) stockholders’ equity?
b. Assume that the seller owes $52,000 on a loan for the land. After receiving the $127,000 cash in (a), the seller pays the $52,000 owed. What is the effect of the payment on the total amount of the seller’s (1) assets, (2) liabilities, and (3) stockholders’ equity?
a.
(1) Total assets increased $44,000.
(2) No change in liabilities.
(3) Stockholders’ equity increased $44,000.
b.
(1) Total assets decreased $52,000.
(2) Total liabilities decreased $52,000.
(3) No change in stockholders’ equity.
156. The Austin Land Company sold land for $85,000 in cash. The land was originally purchased for $65,000. At the time of the sale, $40,000 was still owed to Regions Bank. After the sale, The Austin Land Company paid off the loan. Explain the effect of the sale and the payoff of the loan on the accounting equation.
157. Given the following: Beginning retained earnings $ 70,000
Ending retained earnings $ 48,000
Dividends declared and paid $ 21,000
Calculate net income or net loss.
158. The total assets and the total liabilities of a business at the beginning and at the end of the year appear below. During the year, the company paid $60,000 in cash dividends and issued an additional $45,000 of capital stock.
AssetsLiabilities
Beginning of year$305,000$200,000
End of year365,000230,000
Calculate the net income for the year.
$45,000
159. There are four transactions that affect stockholders’ equity.
(a) What are the two types of transactions that increase stockholders’ equity?
(b) What are the two types of transactions that decrease stockholders’ equity?