Case No. 7 – 3 Stafford Press 1. Analyze the effect of each of these transactions on the items in the balance sheet and income statement. For transactions that affect owner’s equity, distinguish between those that affect the net income of the current year and those that do not. In most cases, the results of your analysis can be set forth most clearly in the form of journal entries.

1.) Amount in dollars ($) Land | | 34,004 | Building | 350,064 | | Accumulated Depreciation | 199,056 | | Book Value | | 151,008 | | | | Total | | 185,042 | | | | | | | Cash received | 149,860 | | Total value of land and buildings | 185,042 | | | (35,182) | | | | |

Cash | 149,860 | | | | Accumulated Depreciation - Buildings | 199,056 | | | | Loss of Sale on Land and Building | 35,182 | | | | Land | | | 34,034 | | Building | | | 350,064 | |

2.) Equipment | 73,645 | | Accumulated Depreciation | 40,890 | | Book Value | 32,755 | | | | | Cash received | 35,200 | | Total value of equipment | 32,755 | | Gain on the sale | 2,445 | |

Cash | 35,200 | | | | Accumulated Depreciation - Equipment | 40,890 | | | | Equipment | | | 73,645 | | Gain on Sale of Equipment | | | 2,445 | |
3.)
Payment | 109,868 | | Freight | 450 | | Installation | 900 | | | | | Total | 111,218 | |

Equipment | 111,218 | | | | Cash | | | 111,218 | |

4.) Payment for the land purchased | 140,000 | | Payment for razing old buildings | 21,235 | | | | | Total | 161,235 | | | | | Land Improvements | 13,950 | |

Land | 161,235 | | | | Land Improvements | 13,950 | | | | Cash | | | 175,185 | |

5.) Cost of new machine | | 28,030 | Trade in allowance | | 7,200 | Cash payment | | 20,830 | | | | Equipment - old | 12,000 | |