Question

State whether each event​ (1) increased,​ (2) decreased, or​ (3) had no effect on the total assets of the business. Identify any specific asset affected. If no​ effect, indicate the reason. Transaction Asset effect Account affected or why assets are not affected a. Paid $400 cash on accounts payable. Decreased Cash b. Made a cash purchase of land for a building site for the business, $89,000. c. Sold land and received cash of $69,000 (the land was carried on the company's books at $69,000). No effect d. Received $15,400 cash from customers on account. Increased Accounts Receivable e. Purchased medical equipment and signed a $90,000 promissory note in payment.

Answer 1

(a) Asset Effect : Decrease, Cash decrease by $400.

(b) Asset Effect : No effect, cash decreases by $89,000 and on the other hand assets increases by $89,000.

(c) Asset Effect : No effect, cash increases by $69,000 and on the other hand assets decreases by $69,000.

(d) Asset Effect : No effect, cash increases by $15,400 and on the other hand Accounts receivables decreases by $15,400.

(e) Asset Effect : Increases, Medical equipment added to the assets.