Show how each of the following transactions affects the basic accounting equation by preparing a table like the one in Exhibit 2-3, and identify the ones that have an immediate impact on the statement of income and/or the statement of cash flows: Exhibit 2-3 a. Bought parts inventory for $15,000, on account. (The company repairs and services vehicles, and will use these parts for repairs.) b. Paid $12,000 to suppliers as partial payment for the purchases that were made in transaction “a.” c. Received $20,000 in cash for repairing and servicing vehicles; another $5,000 of work was done on account. d. Collected $3,000 from customers for the work that was done on account in transaction “c.” The balance remains outstanding. e. In the repair work done in transaction “c,” $10,000 of the parts and supplies inventory was used. f. The owners of the company invested a further $25,000 in the business, and 10,000 additional common shares were issued to them. g. Received utility (electricity, water, and telephone) bills for the month that totalled $600. Paid all these bills except for $100 that will be paid next month. h. Borrowed $50,000 from the bank. i. Bought a vehicle hoist for $45,000. j. Paid the employees their wages for the month, $9,000. k. Recorded accrued interest of $200 on the bank loan. The interest will be paid when the loan is due, in one year.
Show how each of the following transactions affects the basic accounting equation by preparing a…
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