9) Morris Lest began his business, Graters, Inc. with $10,000 of his savings. Graters borrowed $5,000 from Baroque Bank. Graters bought $3,000 worth of graters. The rent for the store is $1,000 per month. The first month's sales were $4,000 for inventory valued at $2,500. All of the transactions were in cash. Identify the get/give transactions above, and determine if there is an increase or decrease in assets, liabilities, or shareholders' equity.
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Total Assets
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Total Liabilities
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Shareholders' Equity
Contributed capital Retained earnings
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Ex. Cash
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Ownership
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+10,000
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+10,000
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10) Identify and describe the three types of business activities.
11) Match each of the following transactions with the appropriate business activity.
a.Operating activity
b.Investing activity
c.Financing activity
_____ 1. Purchase of equipment.
_____ 2. Sale of used equipment.
_____ 3. Sale of T-shirts to a customer.
_____ 4. Payment of advertising.
_____ 5. Issuance of stock.
_____ 6. Payment of dividends.