using the accounting equation to analyze transactions 357120

Using the accounting equation to analyze transactions

Requirement

1. Indicate the effects of the following business transactions on the accounting equation of a Viviani Video store. Transaction (a) is answered as a guide.

a. Received cash of $8,000 and issued common stock.

Answer: Increase asset (Cash)

Increase stockholders’ equity (Common stock)

b. Earned video rental revenue on account, $1,800.

c. Purchased office furniture on account, $400.

d. Received cash on account, $600.

e. Paid cash on account, $100.

f. Sold land for $15,000, which was the cost of the land.

g. Rented videos and received cash of $300.

h. Paid monthly office rent of $900.

i. Paid $200 cash to purchase supplies that will be used in the future.