Transaction analysis and journal entries Below is the summarised balance sheet for Newcombe Ltd as at 31 May 2019. Assets $ Liabilities and shareholders’ equity $ Cash XXXXXXXXXXAccounts payable...

Transaction analysis and journal entries Below is the summarised balance sheet for Newcombe Ltd as at 31 May 2019. Assets $ Liabilities and shareholders’ equity $ Cash 90 000 Accounts payable 110 000 Accounts receivable 106 000 Long-term loan 240 000 Inventory 118 000 Share capital 200 000 Prepayments 45 000 Retained profits 84 000 Equipment 400 000 Accumulated depreciation (125 000) 634 000 634 000 The following transactions occur during June: a Received $23 000 from accounts receivable. b Additional shares worth $80 000 are issued. c Inventory (costing $32 000) is sold on credit for $76 000. d Recognition of $4000 of depreciation expense. e Of the loan, $60 000 is repaid. f Administrative expenses of $7000 are paid. g A total of $9000 of prepayments are used up. h Payment of wages of $13 000. i Purchase of $28 000 worth of inventory for cash. j Dividends of $6000 are paid. k Payment of $36 000 of accounts payable. Required: 1 Show the effect of each of the above transactions on the accounting equation. 2 Prepare an income statement for the month of June and a balance sheet for Newcombe Ltd at 30 June 2019. 3 For each of the above transactions, what is the effect on net profit, total assets, total liabilities and shareholders’ equity? Write ‘increase’, ‘decrease’ or ‘no effect’ for each transaction. 4 Prepare journal entries for each of the 11 transactions above.