(Solved): Based on the following transactions, answer the following questions. i. Purchased inventory with a ...

Expert Answer

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(a) To determine the effect of each transaction on the accounting equation (Assets = Liabilities + Equity), we need additional information about the specific accounts involved. However, we can provide a general analysis based on the given information:

Purchased inventory with a cost of $26,300 on account.
This transaction would increase the inventory asset and increase the accounts payable liability.
ii. Sales on account to customers totalled $59,300.
This transaction would increase accounts receivable (an asset) and increase revenue (a component of equity).
iii. Payments made to employees for wages totalled $19,000.
This transaction would decrease the cash asset and decrease the equity (specifically, the retained earnings if this is an expense).
iv. Cash collections from customers settling their accounts totalled $42,100.
This transaction would increase the cash asset and decrease the accounts receivable asset.
v. Invoice received from the utility company for $3,700 is due in 30 days.
This transaction would increase the accounts payable liability.
vi. Payments totalling $21,100 were made to suppliers to settle part of the balance owing to them.
This transaction would decrease the cash asset and decrease the accounts payable liability.
vii. Received a deposit of $2,600 from a customer for goods to be delivered next month.
This transaction would increase the cash asset and increase a liability (e.g., unearned revenue or customer deposits).