Answer Each Of The Following Transactions Describing The Eff

Answereach Of The Following Transactions Describing The Effect Of Each

Answereach Of The Following Transactions Describing The Effect Of Each

Answer each of the following transactions describing the effect of each transaction on the specific assets, liabilities, and/or stockholder's equity account in the Word document Template which I will furnish: 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 Word document Template to record your answers and submit with your responses. Please note that each of the 9 events needs to have 6 answers to earn all of the possible points according to the instructions in the Word document which I will furnish and you must use it in order to earn all of the points. In addition, there is no paper required for the Transactions. I have replaced this from the Grading Guide "Write a minimum 150-word response describing the effect of each transaction on assets, liabilities, and stockholder's equity" with the Week 2 Word document with the 9 scenarios. So please ignore the Grading Guide for this assignment and use my instructions instead in the Syllabus and also in the Word document Template that I will post for the class. Have to be done by Monday morning at 11

Paper For Above instruction

The following paper provides a detailed analysis of nine selected transactions for Thyme Advertising Company, Inc. Each transaction’s impact on the company's assets, liabilities, and stockholders’ equity is examined comprehensively. This analysis helps understand the fundamental accounting equation and how specific actions influence financial statements, which is essential for sound financial management and accurate reporting.

1. Issuance of Common Stock for Cash: When Thyme Advertising issues common stock to investors in exchange for cash, the company’s assets increase due to the cash inflow. Conversely, stockholders’ equity also increases as the common stock account rises, reflecting investors’ ownership stake in the company. This transaction does not affect liabilities. It signifies an increase in owners’ equity through capital infusion, strengthening the company's financial position.

2. Payment of Monthly Rent: Paying rent decreases the company’s assets, specifically cash, as the expenditure is settled. There is no impact on liabilities or stockholders’ equity directly; however, rent expense recorded reduces net income, which ultimately reduces retained earnings in stockholders' equity on the balance sheet. This represents operational outflow impacting the company’s liquidity and profitability.

3. Cash Receipt from Customers for Services Performed: Receiving cash increases assets (cash) and reflects revenue recognition, which increases stockholders’ equity via retained earnings. This transaction has no impact on liabilities. It signifies inflow of cash from operational activities, enhancing liquidity and profitability metrics.

4. Billing Customers for Services: Billed services create accounts receivable, an asset, which increases total assets. Revenues from services increase retained earnings, thereby increasing stockholders’ equity. This transaction does not impact liabilities. It represents revenue earned but not yet received in cash.

5. Payment of Dividends: Paying dividends reduces both assets (cash) and stockholders’ equity since dividends are distributions of earnings. This transaction does not affect liabilities. It reflects a return to shareholders, decreasing retained earnings and overall equity.

6. Advertising Expense on Account: Incurring advertising expense on account creates a liability (accounts payable) and decreases net income, which reduces retained earnings and stockholders' equity. The asset side is unaffected directly, but the expense recognition impacts financial performance negatively.

7. Cash Collection from Customers Billed in (4): Collecting cash from previously billed customers decreases accounts receivable (asset) and increases cash (asset). There is no overall effect on liabilities or stockholders' equity. It indicates realization of revenue previously recognized and improves cash position.

8. Purchase of Equipment for Cash: Purchasing equipment for cash increases assets (equipment) but decreases cash. There is no immediate effect on liabilities or stockholders’ equity. It signifies investing in long-term assets to support operations.

9. Purchase of Equipment on Account: Buying equipment on account increases assets (equipment) and liabilities (accounts payable). The transaction does not directly impact stockholders’ equity. It reflects an acquisition financed partially through credit, affecting the company's leverage.

References

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