- •Levon Gzokyan ● Business & English ● Unit 4
- •Financial statements
- •Balance sheet
- •Transaction 2, Loan from bank.
- •Transaction 3, Acquire store equipment for cash.
- •Transaction 4, Purchase inventory for cash
- •Transaction 5, Purchase inventory on credit
- •Transaction 6, Purchase inventory for cash plus credit
- •Transaction 7, Sale of asset for cash
- •Transaction 8, Return of inventory to supplier
- •Transaction 9, Payment to creditor
- •Transaction 10, Purchase car (to be analyzed entirely by you)
- •Transaction 11, Sales on open account, January 17
- •Transaction 12, Collection of accounts receivable, February 3
- •Cash flow statement
- •Which of the following investing activities increase/decrease cash:
- •See ‘Battle Point’ in unit 3 for instructions.
Transaction 4, Purchase inventory for cash
January 4. Book Corner acquires stationery and office supplies from a manufacturer for $3,000 cash. This transaction creates an asset called Inventory.
Assets |
= |
Liabilities |
+ |
Owners' Equity |
||||||
|
Cash |
Inventory |
Store Equipment |
|
Note Payable |
Accounts payable |
Eugene, Capital |
|||
Bal. |
65,000 |
15,000 |
= |
50,000 |
|
30,000 |
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(4) |
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|
|
= |
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|
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Bal. |
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|
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= |
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|
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80,000 |
|
80,000 |
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Transaction 5, Purchase inventory on credit
January 5. Book Corner buys books for $5,000 from a publishing house which requires $2,000 by January 10 and the balance in 30 days. This transaction creates a liability called Account payable.
Assets |
= |
Liabilities |
+ |
Owners' Equity |
||||||
|
Cash |
Inventory |
Store Equipment |
|
Note Payable |
Accounts payable |
Eugene, Capital |
|||
Bal. |
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|
|
= |
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|
|
|||
(5) |
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|
|
= |
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|
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Bal. |
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|
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= |
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|
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85,000 |
|
85,000 |
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Transaction 6, Purchase inventory for cash plus credit
January 6. Book Corner buys more books from another publishing house for $7,000. This manufacturer requires a cash down payment of $3,500, and Book Corner must pay the remaining balance in 60 days.
Assets |
= |
Liabilities |
+ |
Owners' Equity |
||||||
|
Cash |
Inventory |
Store Equipment |
|
Note Payable |
Accounts payable |
Eugene, Capital |
|||
Bal. |
|
|
|
= |
|
|
|
|||
(5) |
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|
|
= |
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Bal. |
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|
|
= |
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|
|
|||
88,500 |
|
88,500 |
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