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Locator assignment-take&inpro; m/ilrm/takeAssignment/takeAssignmentMain.do?invoker-assignments&tak; eBook Video Calculator Describe a transaction that resulted in each of the following entries affecting the accounting equation Assets - Liabilities Owner\'s Equity Office Professional Accounts Cash+ +Haas, Capital Equipment Equipment Payable +37,000 (a) +37,000 (b) -2,950 Bal. 34,050 +2,950 +2,950 37,000 +750 +750 Bal. 34,0507502,950750+37,000 +7,850 +5,150 (d) 2,700 Bal 31,350750 +10,8005,90037,000 2,700 (e) -2,700 37,000 Bal. 28,65o 750 10,8003,200+ 40,200 40,200 b. Check My Work All work saved

Solution

(a).

In this case $37000 introduced as capital in cash that is why cash balance has increased and equity has also increased by $37000.

(b).

Professional equipment purchased on cash $2950.

As we know that when an equipment is purchased on cash then cash balance will be reduced and balance of professional equipment will increase.

(c).

In this case office equipment of $750 has been purchased on account / credit. That is why assets has been increased by $750 and liabilities has also increased by same amount $750.

(d).

Professional equipment has been purchased for $7850 and $2700 is paid in cash and balance amount of $5150 is on account. That is why as a result cash is decreased by $2700 and equipment is increased by $7850. And in same manner liabilities also increased by $5150. Thus overall net effect on both side will be equal.

(e).

In this case $2700 is paid for current liability (account payable). So as a result both side has been decreased by same amount $2700.

Cash is paid hence cash balance is decreased by $2700 wheras balance of account payable is also decreased by $2700 because payment is made to account payable.