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The following transactions relate to SASCO Ltd. Determine which of the following possibilities occurred as a result of each transaction: an asset increased, an asset decreased, a liability increased, a liability decreased, equity increased, or equity decreased. Indicate increase (+) or decrease (-).

1. Owner invested SR 50,000 in the bank and SR 100,000 cash to start the business in return for stock.
- Assets: +150,000
- Equity: +150,000

2. Purchased supplies from Dubai for SR 10,000.
- Assets: +10,000 (Supplies)

3. Purchased equipment for SR 15,000 cash and SR 20,000 on account.
- Assets: +35,000 (Equipment)
- Assets: -15,000 (Cash)
- Liabilities: +20,000

4. Purchased supplies for SR 5,000 by cheque and equipment for SR 10,000 on account.
- Assets: +5,000 (Supplies)
- Assets: -5,000 (Cash)
- Assets: +10,000 (Equipment)
- Liabilities: +10,000

5. Borrowed SR 45,000 from Bank Al Bilad.
- Assets: +45,000 (Cash)
- Liabilities: +45,000

6. Provided cleaning services and received SR 40,000 cash.
- Assets: +40,000 (Cash)
- Equity: +40,000 (Revenue)

7. Paid salaries of SR 30,000 to employees.
- Assets: -30,000 (Cash)
- Equity: -30,000 (Expense)

8. Dividends of SR 8,000 are paid to shareholders.
- Assets: -8,000 (Cash)
- Equity: -8,000

9. Paid SR 15,000 amount to the creditor against equipment purchase.
- Liabilities: -15,000
- Assets: -15,000 (Cash)

10. Paid outstanding electricity bills of SR 2,500.
- Assets: -2,500 (Cash)
- Equity: -2,500 (Expense)

11. Accounts receivable of SR 3,000.
- Assets: +3,000 (Accounts Receivable)

12. Paid loan to Al Bilad of SR 45,000.
- Assets: -45,000 (Cash)
- Liabilities: -45,000

Answer :

Final answer:

The transactions and their impacts on assets, liabilities, and equity of SASCO Ltd.

Explanation:

The following transactions relate to SASCO Ltd:

  1. Owner invested SR 50,000 bank and SR 100,000 cash to start the business in return for stock (Equity increased).
  2. Purchased supplies from Dubai for SR 10,000 (Assets decreased).
  3. Purchased equipment for SR 15,000 cash and SR 20,000 on account (Assets decreased).
  4. Purchased supplies of SR 5,000 by cheque and equipment of SR 10,000 on account (Assets decreased).
  5. Borrowed SR 45,000 from Bank Al Bilad (Liability increased).
  6. Provided cleaning services and received SR 40,000 cash (Assets increased).
  7. Paid salaries of SR 30,000 to employees (Assets decreased).
  8. Dividends of SR 8,000 are paid to shareholders (Equity decreased).
  9. SR 15,000 amount paid to the creditor against equipment purchase (Liability decreased).
  10. Paid outstanding electricity bills SR 2,500 (Assets decreased).
  11. Accounts receivable SR 3,000 (Assets increased).
  12. Paid loan to Al Bilad SR 45,000 (Liability decreased).

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