Indicate how the following transactions of McDonald’s Corp. (MCD) , would affect
ID: 2330710 • Letter: I
Question
Indicate how the following transactions of McDonald’s Corp. (MCD), would affect the three elements of the accounting equation. If an element increases and decreases by the same amount, select "no effect."
Effects of Transactions on Accounting Equation Indicate how the following transactions of McDonald's Corp. (MCD), would affect the three elements of the accounting equation. If an element increases and decreases by the same amount, select "no effect." a. Paid research and development expenses for the current year Assets Liabilities Stockholders' equity b. Purchased machinery and equipment for cash. Assets Liabilities Stockholders' equity c. Received cash from issuing stock. Assets Liabilities Stockholders' equity no effect increase increaseExplanation / Answer
Answer
> All explanations are provided wherever required.
>Concerned account which is affected is also referenced for understanding.
Transactions Effect on concerned account Assets Liabilities Stockholder's Equity a Paid Research & Development expense No Effect [Cash decreased, but Asset increases= no effect] No Effect No Effect b Purchased machinery for cash No Effect [Cash decreases, Machinery Asset increases] No Effect No Effect c received cash from issuing stock Increases [Cash balance] No Effect Increases [Common Stock] d Received cash from long term debts Increases [Cash balance] Increases [Long Term Liabilities] e Made Cash sales Increases [Cash balance] No Effect Increases [retained earnings - Net Income revenue] f paid Selling expenses Decreases [Cash Balance] No Effect Decreases [retained earnings - Net Income Expenses] g paid Employees pension expenses Decreases [Cash Balance] No Effect Decreases [retained earnings - Net Income Expenses] h Received Cash from selling manufacturing equipment for gain Increases No Effect Increases [by the amount of gain] i Paid Office Salaries Decreases [Cash Balance] No Effect Decreases [retained earnings - Net Income Expenses] j paid Taxes Decreases [Cash Balance] No Effect Decreases [retained earnings - Net Income Expenses] k paid Off long Term debts Decreases [Cash Balance] Decreases [Long Term liabilities] l Paid Dividends Decreases [Cash Balance] No Effect Decreases [retained earnings]