Extreme Inflatables earns service revenue by providing party planning services and inflatable playscapes. Extreme Inflatables is organized as a corporation. During the past month, Extreme Inflatables has the following transactions:
a. Investors contributed $ 8,000 to the corporation in exchange for common stock.
b. Purchased equipment for $ 2,000 on account.
c. Paid $ 300 for office supplies.
d. Earned and received $ 1,500 cash for service revenue.
e. Paid $ 200 for wages to employees.
f. Cash dividends of $ 500 were paid to stockholders.
g. Earned $ 2,000 for services provided. Customer has not yet paid. h. Paid $ 800 for rent.
i. Received a bill for $ 150 for the monthly utilities. The bill has not yet been paid.
Indicate the effects of the business transactions on the accounting equation for Extreme Inflatables. Transaction (a) is answered as a guide.
a. Increase asset (Cash); Increase equity (Common Stock)