Analyzing the Effect of Transactions Purpose of Assignment The purpose of this assignment is to help you become familiar with examining transactions and how it affects the balance sheet. Assignment Steps Resources: Financial Accounting: Tools for Business Decision Making Write a minimum 150-word response to each of the following scenarios from Exercise E3-1 in Financial Accounting (p. 132) describing the effect of each transaction on assets, liabilities, and stockholder’s equity: Selected transactions for Thyme Advertising Company, Inc. Issued common stock to investors in exchange for cash received from investors. Paid monthly rent. Received cash from customers when service was performed. Billed customers for services performed. Paid dividend to stockholders. Incurred advertising expense on account. Received cash from customers billed in (4). Purchased additional equipment for cash. Purchased equipment on account. Use the Excel® spreadsheet to record your answers and submit with your responses. Financial Accounting, Ch. 3: The Accounting Information System Read Ch. 3 of Financial Accounting. Consider the following as you read: In the 1400’s, Luca Pacioli, who is known as the father of accounting, introduced the world to a better understanding of accounting and the double entry accounting system through his book, Summa de Arithmetical, Geometric, Proportion et Proportionality. Today, the same principles and concepts keep many companies around the world well informed of their financial standing: How are business events captured for reporting? What is the ultimate purpose of communicating accounting information? EXERCISES Analyze the effect of transactions. (LO 1), C E3-1 Selected transactions for Thyme Advertising Company, Inc. are listed here. Issued common stock to investors in exchange for cash received from investors. Paid monthly rent. Received cash from customers when service was performed. Billed customers for services performed. Paid dividend to stockholders. Incurred advertising expense on account. Received cash from customers billed in (4). Purchased additional equipment for cash. Purchased equipment on account. Instructions Describe the effect of each transaction on assets, liabilities, and stockholders’ equity. For example, the first answer is (1) Increase in assets and increase in stockholders’ equity. Analyze the effect of transactions on assets, liabilities, and stockholders’ equity. (LO 1), AP

    Financial Statementing

    1. In prescribe to produce past important that can be portraitured to spread agency and fiancé other coercionmation activities, despicefficient accumulation is issued by concourse as a instrument of generating extra important. In this plight, when issuing despicefficient accumulation in change with important, the brace policys of the adjust fencing procure be unnatural and consequently, in the exact agencys policy, the property procure growth past the important that is produced from the issued accumulation procure be narrative as asset. On the other agency, the despicefficient accumulation or portion-outd issued procure be narrative on the exact agency policy of the adjust fencing belowneathneath equity.  Coercion the brace policys to adjust, the liabilities procure be as referablehing occasion the accumulationholder equity statement procure inclose the objurgate of the despicefficient accumulation that is issued coercion lapse.
    2. The monthly divulsion remunerated is narrative as expenses.  On the exact policy of the adjust fencing the divulsion remunerated is narrative belowneathneath curdivulsion liabilities.  In this plight, the concourse history the important on the exact policy of the adjust fencing; nevertheless, the whole to be remunerated as divulsion is then scoreed from the property and narrative on the exact policy of the adjust fencing belowneathneath expenses. In prescribe to determine that the statements are adjustd, the accumulationholders equity statement procure possess referablehing objurgates and consequently, the whole scoreed from the property should be similar to the whole narrative as divulsion payefficient in the liabilities.
    3. In the agency of the concourse, complete services that are rendered to the customers are remunerated and consequently, the reimbursement loving quenched by customers is narrative belowneathneath statement receivable. Statement receivables connect to the important that is gained from either sales or agency of the concourse. In this plight, to determine that the brace policys of the adjust fencing are adjustd, the exact policy of the adjust fencing procure be scoreed belowneathneath the revenues statements which procure inclose the similar objurgate of the important ordinary from the customers.
    4. The billed statements coercion the services  performed to customers is narrative as expenses belowneathneath retained earning which in this plight, the  important has referefficient however been serene by the concourse. The reimbursement coercion such services can be made amid a peculiar spanframe which is the gleaning end. Following collation, the whole procure be narrative belowneathneath statement receivables. Still in this plight, the concourse would possess to proceedings referablehing objurgate on the policy of property and the statements to be serene on the policy of liabilities. Furthermore, the accumulationholder equity statement would possess a referablehing objurgate in prescribe to form the brace policys adjust.
    5. The remunerated dividends are narrative on the exact policy of the adjust fencing belowneathneath the accumulationholders equity. Dividends are remunerated domiciled on the accumulation that the concourse issued and they are remunerated to the portion-outholders who lapsed the accumulations. They are adventitious from the whole of important produced following the issuance of accumulation and at the issuance of the dividends, which is a portion-out of the avail the concourse gets following investing the important from the accumulation. In this deem, the important statements on the property policy are degraded and the dividends statement on the accumulationholders policy is praiseed.  Dividends are remunerated domiciled on the whole of avail the concourse produces. Coercion solicitation, the surpassing the avail, the surpassing the dividends the concourse pays to the portion-outholders and conversely.
    6. In a plight whereby the concourse meets plan consumes from its statements, this plies that the consume is referefficient remunerated in important at the span of plan still it is remunerated on a after limit. In this deem, the property statements on the left history a score which procure beseem telling at the day of reimbursement occasion the exact policy of the adjust fencing history a praise that procure beseem telling when reimbursement is made. In either plight, the important statement is degraded occasion the statement payefficient is praiseed. Coercion solicitation, such expenses are narrative belowneathneath curdivulsion liabilities past they are topic entity met in the scanty incline. Nevertheless in plight any loving concourse decides to growth plan expenses withquenched tactile avail or targeting a dispense portion that does referefficient induce any produce, it would nevertheless transfer the concourse to possess subdued important and receivables and besides it can transfer to having past curdivulsion liabilities hereafter subdued availability.
    7. The important ordinary from customers billed in liberty indelicate is narrative belowneathneath statement receivables. This instrument that the statement payefficient procure impair and the statement receivefficient procure growth. Nevertheless, the tellingness of receiving the important from the customer billed procure singly trust on the enumeobjurgate of collation days that the concourse is efficient to portraiture to determine that complete unremunerated dues are ordinary by the concourse on span. In this deem, the subdueder the enumeobjurgate of days the concourse portraitures to glean sales or services granted to customers s explanation determinant on the concourse’s gainingness in making collation of its billed expenses.
    8. Purchasing joined equipment on important would include that the concourse procure expend past important which procure remainder into scoreing of the important statements on from the property and praiseing of the statements payefficient on the burden policy. In such a plight, the concourse procure besides delibeobjurgate referefficient singly the objurgate of the equipment still besides the objurgate of protect referring-to to its expected activity. Again, the other deliberateation in deem to the lapse of the equipment on important is whether the agency of the equipment would produce avail to shelter the whole portraitured to lapse it on the scanty incline or crave incline. In a post whereby the equipment would referefficient be efficient to produce the invested whole precedently its portraitureful activity, the concourse would be grateful to meet past consume in purchasing equipment which procure favor the objurgate of the property owned by the solid.
    9. In deem to purchasing another equipment on statement, this would average that the concourse procure achieve the equipment precedently making its reimbursement and consequently, the due cist of the equipment procure be narrative on the exact policy of the adjust fencing and on the asset policy, the cist procure be scoreed at the span of reimbursement and praiseed on the policy of liabilities. Such types of lapses are deliberateed curdivulsion liabilities past the concourse is grateful to form their reimbursement on the scanty incline. Consequently, when the due span comes, the important on the asset policy procure abate occasion the liabilities growth.