Determine the effects of the following transactions on Current assets, Current liabilities, and Working Capital. Write “Inc” for an Increase, “Dec” for a Decrease, or “NE” if there is No Effect. Write your answers in the blanks provided. Current AssetCurrent LiabilityNet Working Capital1. Sale of merchandise on account 2. Acquired shares of ABS CBN for cash 3. Pays the long-term debt of P150,000 4. Sells old machine for P10,000 cash 5. Issued shares of stock to cash investors 6. Declared cash dividends 7. Payment of advance rentals (asset method) 8. One year loan from a bank 9. Issued shares of stock to pay short term loan 10. Collection of receivables 11. Cash redemption of bonded debt 12. Six months interest received in advance(liability method is used) 13. Issued stock dividends 14. Payment of cash dividends declared in #6 15. Sell of equipment for P50,000; P30,000 paid in cash, balance received one year note

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FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Determine the effects of the following transactions on Current assets, Current liabilities, and Working Capital. Write “Inc” for an Increase, “Dec” for a Decrease, or “NE” if there is No Effect. Write your answers in the blanks provided.

	Current Asset	Current Liability	Net Working Capital
1. Sale of merchandise on account
2. Acquired shares of ABS CBN for cash
3. Pays the long-term debt of P150,000
4. Sells old machine for P10,000 cash
5. Issued shares of stock to cash investors
6. Declared cash dividends
7. Payment of advance rentals (asset method)
8. One year loan from a bank
9. Issued shares of stock to pay short term loan
10. Collection of receivables
11. Cash redemption of bonded debt
12. Six months interest received in advance (liability method is used)
13. Issued stock dividends
14. Payment of cash dividends declared in #6
15. Sell of equipment for P50,000; P30,000 paid in cash, balance received one year note

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