Question

The following transactions occur for Badger Biking Company during the month of June:a. Provide services to customers on account for $50,000.b. Receive cash of $42,000 from customers in (a) above.c. Purchase bike equipment by signing a note with the bank for $35,000.d. Pay utilities of $5,000 for the current month.Analyze each transaction and indicate the amount of increases and decreases in the accounting equationTransaction Assets = Liabilities + Stockholders’ Equity(a) (b) (c) (d)

Answer 1

Assets = Liabilities + Stockholders' Equity

(a) $50,000 (AR) $50,000 (RE)

(b) $42,000 (C) - $42,000 (AR)

(c) $35,000 (Equip) $35,000 (NP)

(d) -$5,000 (C) -$5,000 (C)

total $80,000 $35,000 $45,000

on (b), assets total amount doesn't change, one account replaces the other