ACTIVITY $85$PurposeO$4$O$50607$ANALYZE TRANSACTIONS AND EVENTSAnalyze transactions and events using the accounting equation,A transaction is an event that affects the financial position ofan enterprise, it changes an asset $($A$),$Iiability $($L$),$ or stockholders' equity $($SE$)$ account. A company is not liable for payment of suppliesuntil the supplies $($are ordered $/$ arrive$)$ Therefore, an order $($is $/$is not$)$ a transaction and $($is l isnot$)$ recorded. Because the arrival of supplies increases an asset and creates a liability this event $($is$/$is not$)$ a transaction and $($is $/$is not$)$ recorded.Because a transaction consists of "give and take, at least $($one two three$)$ accounts are alwaysaffected. Therefore, this method is referred to as $($the give$-$n$-$take method $/$ double$-$entryaccounting$)"$Investors contribute $$30,000$ of cash in exchange for the common stock of a company" is is not$)$a transaction that affects $($cash $/$ accounts receivable$)$ and $($retained earnings $/$ common stock$).$Cash is aln$)($A$/$L$/$SE$)$ account that would $($increase $/$ decrease$)$ by $$30,000.$ Common stock is afnAL$/$SE$)$ account that would $($increase$/$ decrease$)$ by $$30,000.$Revenue, expense, and dividend account data are recorded in the Retained Earnings column.Retained earnings is increased by $($net income $/$ dividends$)$ and decreased by $($net income $/$dividends$).$ Therefore, "Doogie's provided dog grooming services for $$20,000$cash is a transactionthat afects $($cash accounts receivable$)$ and $($revenue $/$ expense$).$ Because revenue $($increasesdecreases$)$ net income and net income $($increases decreases$)($retained earnings commonstock$),$ the revenue portion of this transaction is listed under the Retained Earnings colum.Doogie's Dog Grooming Corporation started business in July. The chart on the following page listseight events that occurred during July for Doogie's. For each transaction, indicate which accountsincreased or decreased and identify the amount and account title under the appropriate heading. itan event is not a transaction, recOrdt $"$No Tansaction"n the Retained Earnings column recordrevenue, expense, and dividend account data. Use the Chart of Accounts on the previous page.Transaction #$1$ is completed for you.For each of the six columns in the chart, compute the ending balance for Juhy and record in thebottom row of the chart.,Total assetsFor each balance sheet classification listed below compute the ending balance for JulyTotal liabilitiesTotal stockholders equityQ$8$sthe accounting equation in balance at the end of J$$ly$?($Yes No

ASSETSCash#$1$ July $130,000$OtherAssetsDoogie's Dog Grooming CorporationTRANSACTIONSJulyLIABILITIES#$6$ JulyAccountsPayable$09$STOCKHOLDERS' EQUITYRetainedEarningsCommonDoogie's Dog Grooming Corporation began by issuing $1,000$ shares of common stockin exchange for $$30,000$ cash.#$2$ July $1$ Doogie purchased a grooming tab$$e and other equipment for $$18,000$ cash.# uly $1$ Doogie purchased a one$-$year insurance policy for $$2,400$ cash.Prepaid insurance$2,400$Stock$4$ July i DoDgie ordered doggie treats and other supplies totaling $$1,200.+30,000$#$5$ July $6$ The doggie treats and other supplies arrived along with a bil for $$1,200.$#$8$ July $31$ Doogie paid a $$400$ cash dividend to shareholders.Compute the BALANCE in each account at the end of luly.Doogie's provided dog grooming services far $$20,000$ cash.#$7$ July $31$ Doogie paid employee wages of $$2,000$ and rent of $$1,500$ for July$\mathrm{.}30,000$Revenue$20,000$Transaction #$6$ affects $(1/2/3)$ accounts and is referred to as a $($doublet compound$)$ entryYwhereas Transaction #$7$ affects $(1/2/3)$ accounts and is referred to as a $($doubleentrycompound$)$