Using the accounting equation to analyze transactions
Requirement
1. Indicate the effects of the following business transactions on the accounting equation of a Viviani Video store. Transaction (a) is answered as a guide.
a. Received cash of $8,000 and issued common stock.
Answer: Increase asset (Cash)
Increase stockholders’ equity (Common stock)
b. Earned video rental revenue on account, $1,800.
c. Purchased office furniture on account, $400.
d. Received cash on account, $600.
e. Paid cash on account, $100.
f. Sold land for $15,000, which was the cost of the land.
g. Rented videos and received cash of $300.
h. Paid monthly office rent of $900.
i. Paid $200 cash to purchase supplies that will be used in the future.