Answer:
Tiger Company
1. Accounts, Amounts, and Effects on the Accounting Equation:
Date Assets = Liabilities + Stockholders' Equity
Jan. 3 Inventory $31,000 increased = Accounts Payable $31,000 increased + Stockholders' Equity
Jan. 27 Cash $31,000 decreased = Accounts Payable $31,000 decreased + Stockholders' Equity.
Apr. 1 Cash $87,000 increased = Notes Payable $87,000 increased + Stockholders' Equity
June 13 Inventory $9,400 increased = Accounts Payable $9,400 increased + Stockholders' Equity
July 25 Cash $9,400 decreased = Accounts Payable $9,400 decreased + Stockholders' Equity.
Aug. 1 Cash $9,400 increased = Liability + Rent Revenue (Retained Earnings) $9,400 increased.
Dec. 31 Assets = Wages Payable $19,000 increased + Wages Expense (Retained Earnings) $19,000 decreased
Dec. 31 Assets = Interest Payable $1,305 increased + Interest Expense (Retained Earnings) $3,915 decreased
Dec. 31 Assets = Unearned Rent Revenue $3,525 increased + Rent Revenue (Retained Earnings) $3,525 decreased.
2. Indication of whether the debt-to-assets ratio is increased or decreased:
Date Effect Numerator Denominator
Jan. 3 Increased, Debt is increased, Assets are increased
Jan. 27 Decreased, Debt is decreased, and Assets are decreased
Apr. 1 Increased, Debt is increased, Assets are increased
June 13 Increased, Debt is increased, Assets are increased
July 25 Decreased, Debt is decreased, and Assets are decreased
Aug. 1 Increased, Debt is increased, Assets are increased
Dec. 31 Increased, Debt is increased, Assets are not affected.
Dec. 31 Increased, Debt is increased, Assets are not affected.
Dec. 31 Increased, Debt is increased, Assets are not affected.
Explanation:
The accounting equation indicates the balance that exists between the basic elements of accounting. It states that Assets = Liabilities + Stockholders' Equity. For every transaction, this equation holds true, because by the double entry system of bookkeeping, two or more accounts are always involved in every business transaction.
