Question

Analyze the following transactions using the analyzing accounting equation. Shanna started business by investing cash of K40,000 & K 5,000 and Machinery K10,000​.

Answer 1

To analyze the transactions using the accounting equation, we need to understand the components of the equation: Assets = Liabilities + Owner's Equity. Shanna invests cash of K45,000 and machinery worth K10,000, thus increasing the Assets side of the equation to K55,000.

Step-by-step explanation:

To analyze the transactions using the accounting equation, we need to understand the components of the equation. The accounting equation is Assets = Liabilities + Owner's Equity. Assets are the resources owned by the business, Liabilities are the debts or obligations of the business, and Owner's Equity represents the owner's claim on the assets.

Let's analyze the transactions:

1. Shanna started the business by investing cash of K40,000 and K5,000. This increases the Assets side of the equation by K45,000 (K40,000 + K5,000).

2. Shanna also invested Machinery worth K10,000. This further increases the Assets side of the equation by K10,000.

So, the updated equation becomes:

Assets = K45,000 + K10,000 = K55,000.