+12,000 = 0 –1,000 +800 = +800 +3,000 = +2,000 –1,000 E2-5 Req. 1 Assets = Liabilities + Shareholders’ Equity +216 = +5 –211 +21 = Contributed +21 Capital TOTALS 26 = 5 + 21 Req. 2 The separate entity assumption states that transactions of the business are separate from transactions of the owners. Because transaction (c) occurs between the owners and others in the stock market, there is no effect on the business. Req. 3 The greater increase in shareholders’ equity (versus liabilities) indicates that these transactions led NIKE to rely proportionately more on shareholders (versus creditors). E2-6 a. dr Cash (+A) 10,000 crContributed Capital (+SE) 10,000 b. dr Cash (+A) 7,000 Notes Payable (+L) 7,000 cr c. dr Land (+A) 12,000 cr Cash (A) 1,000 cr Notes Payable (+L) 11,000
+12,000 –1,000 = +800 = +800 +3,000 –1,000 = +2,000 E2-5 Req. 1 Assets = Liabilities + Shareholders’ Equity +216 –211 = +5 +21 = Contributed Capital +21 TOTALS 26 = 5 + 21 Req. 2 The separate entity assumption states that transactions of the business are separate from transactions of the owners. Because transaction (c) occurs between the owners and others in the stock market, there is no effect on the business. Req. 3 The greater increase in shareholders’ equity (versus liabilities) indicates that these transactions led NIKE to rely proportionately more on shareholders (versus creditors). E2-6 a. dr Cash (+A) 10,000 crContributed Capital (+SE) 10,000 b. dr Cash (+A) 7,000 cr Notes Payable (+L) 7,000 c. dr Land (+A) 12,000 cr Cash (A) 1,000 cr Notes Payable (+L) 11,000 0
Solution-Manual-Fundamentals-of-Financial-Accounting-Canadian-4th-Edition-Phillips.docx