contestada

The following transactions occur for Badger Biking Company during the month of June:

a. Provide services to customers on account for $36,000.
b. Receive cash of $28,000 from customers in (a) above.
c. Purchase bike equipment by signing a note with the bank for $21,000.
d. Pay utilities of $3,600 for the current month.

Required:
Analyze each transaction and indicate the amount of increases and decreases in the accounting equation.

Respuesta :

hyderali230

Answer:

A pdf file is attached to show the effect of each transaction on accounting equation, Please find it.

Explanation:

Accounting equation is

Assets = Equity + Liabilities

a.

The services are performed on account means that the revenue of $36,000 is recorded against the receivable of the same value.

b.

Receiving cash will increases the cash balance as an asset and reduces the  receivable value.

c.

Bike Equipment are assets and it will increase the value of assets and Note payable is a liability instrument which will increase the liabilities.

d.

Utilities payment will decrease the cash in the assets section and reduce the equity balance as an expense.

Otras preguntas