3-9 (Static) Determining Accounting Equation Effects and Net Income [LO 3-2, LO 3-3]
Nolverine World Wide, Incorporated, manufactures military, work, sport, and casual footwear and leather accessories under a variety of
brand names, such as Caterpillar, Hush Puppies, Wolverine, and Steve Madden. The following transactions occurred during a recent
nonth.
1. Made cash sales of $49,000 (example).
1. Purchased $3,000 of additional supplies on account.
:Borrowed $58,000 on long-term notes.
1. Purchased $18,600 in additional equipment, paying in cash.
. Incurred $27,000 in selling expenses, paying two-thirds in cash and owing the rest on account.
f. Paid $4,700 in rent on the last day of this month, and also paid $4,700 for next month's rent.
Required:
For each of the transactions, complete the following table, indicating the account, amount, and direction of the effect (+ for increase
and - for decrease) of each transaction under the accrual basis. Include revenues and expenses as subcategories of stockholders'
equity, as shown for the first transaction, which is provided as an example.
Determine the company's preliminary net income.
Complete this question by entering your answers in the tabs below.
Required 1 Required 2
For each of the transactions, complete the following table, indicating the account, amount, and direction of the effect (+ for increase and for decrease) of each
accrual basis. Include revenues and expenses as subcategories of stockholders' equity, as shown for the first transaction, which is provided as an example. (Ente
Assets, Liabilities, and Stockholder's Equity with a minus sign.)
Transaction
a.
b.
Cash
Assets
49,000
Liabilities
Stockholders' Equity
Sales Revenue
49,000
