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Llana [10]
2 years ago
12

Evaluate each of the following transactions in terms of their effect on assets, liabilities, and equity. 1. Buy $15,000 worth of

manufacturing supplies on credit 2. Purchase equipment for $48,000 in cash 3. Receive payment of $13,000 owed by a customer 4. Issue $70,000 in stock 5. Borrow $65,000 from a bank 6. Pay $5,000 owed to a supplier 7. Purchase equipment for $42,000 in cash What is the net change in Total Liabilities
Business
2 answers:
Svetlanka [38]2 years ago
8 0

The Net change in Total Liabilities is $75,000.

<h3>Net change in Total Liabilities</h3>

1. Buy $15,000 worth of manufacturing supplies on credit

  • Assets increase by $15,000
  • Liabilities increase by $15,000
  • No effect on equity

2. Purchase equipment for $48,000 in cash

  • No effect on asset
  • No effect on liability
  • No effect on equity  

3. Receive payment of $13,000 owed by a customer

  • No effect on asset
  • No effect on liability
  • No effect on equity

4. Issue $70,000 in stock

  • Assets increase by $70,000
  • No effect on liability
  • Equity increases by $70,000

5.  Borrow $65,000 from a bank

  • Assets increase by $65,000
  • Liabilities increase by $65,000
  • No effect on equity  

6. Pay $5,000 owed to a supplier

  • Assets decrease by $5,000
  • Liabilities decrease by $5,000
  • No effect on equity

6. Purchase equipment for $42,000 in cash

  • No effect on asset
  • No effect on liability
  • No effect on equity  

Net change in Liabilities:

Net change in liabilities =$15,000 +$65,000 -$5,000

Net change in liabilities= $75,000

Therefore the Net change in Total Liabilities is $75,000.

Learn more about Net change in Total Liabilities here:brainly.com/question/23980009

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arlik [135]2 years ago
3 0

1. An evaluation of the following transactions' effect on assets, liabilities, and equity is as follows:

                         Assets      =       Liabilities       +      Equity

  1.               +$15,000           +$15,000         +      $0
  2.                $0
  3.                $0
  4.              +$70,000           +$0                  +       $70,000
  5.              +$65,000           +$65,000
  6.               -$5,000                -$5,000
  7.               $0
  8. Total      $145,000    =       $75,000       +       $70,000

2. The net change in total liabilities is $75,000 (a reduction of $5,000).

<h3>Transaction Analysis:</h3>
  1. Raw Materials Inventory $15,000 Accounts Payable $15,000
  2. Equipment $48,000 Cash $48,000
  3. Cash $13,000 Accounts Receivable $13,000
  4. Cash $70,000 Common stock $70,000
  5. Cash $65,000 Bank Payable $65,000
  6. Accounts Payable $5,000 Cash $5,000
  7. Equipment $42,000 Cash $42,000

<h3>Total Liabilities:</h3>

Accounts Payable $15,000

Bank Payable $65,000

Accounts Payable ($5,000)

Net change =  $75,000

Thus, the evaluation shows that with each transaction, the assets are always equal to liabilities and equity.

Learn more about the balance sheet (accounting) equation at brainly.com/question/24401217

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