To ensure that you understand the accounting equation (A = L + E), and how particular transactions affect it, complete the following exercise. You are simply required to explain how each event listed would change the equation (if at all).

1. The owner contributed $10,000 cash and a vehicle valued at $6,000 to start the business.

Assets = Liabilities + Equity

2. Stock (inventory) was purchased for the business at a cost of $3,000. This was paid in cash from the business bank account.

Assets = Liabilities + Equity

3. A cash register was purchased at a cost of $4,000. An amount of $1,000 was paid in cash from the business bank account. The balance of $3,000 has to be paid to the supplier within 60 days. The cash register has been delivered to the business. Assets = Liabilities + Equity

4. The owner withdrew $200 from the business bank account for her own personal use. It was used by the owner to pay for groceries for herself and her family.

Assets = Liabilities + Equity