a. Littlechild invested 160,000 cash and office equipment valued at 20,000 in the business. b. Purchased a small building for 600,000 to be used as an office. Paid 100,000 in cash and signed a note payable promising to pay the balance over severa years. c. Purchased 3,000 of office supplies for cash d. Purchased 72,000 of office equipment on credit e. Littlechild made reservations at a hotel hosting a kitchen and bath design conference in August 2023. He will send a 1,000 deposit on July 1,2023 f. Completed a project on credit and billed the client 5,200 for the work. a. Paid a local online newspaper 3,500 for an announcement that the office had opened h. Completed a project for a client and collected 4,000 cash. i. Made a 4,000 payment on the equipment purchased in (d) j. Received 2,500 from the client described in (f) k. Paid 7,000 cash for the office secretary's wages 1. Littlechild withdrew 3,600 cash from the company bank account to pay personal living expenses. 182. Complete the following table. Use additions and subtractions to show the transactions' effects on the elements of the equation. For each change in equity, select whether the change was caused by an investment, a revenue an expense, or a withdrawal. Determine the final total for each item and verify that the equation is in balance. (Enter all amounts as positive values . If the Deterr ction/event does not affect equity or does not require a journal entry.select "No Affect on Equity" in the Explanation of Required:

Question

a. Littlechild invested 160,000 cash and office equipment valued at 20,000 in the business. b. Purchased a small building for 600,000 to be used as an office. Paid 100,000 in cash and signed a note payable promising to pay the balance over severa years. c. Purchased 3,000 of office supplies for cash d. Purchased 72,000 of office equipment on credit e. Littlechild made reservations at a hotel hosting a kitchen and bath design conference in August 2023. He will send a 1,000 deposit on July 1,2023 f. Completed a project on credit and billed the client 5,200 for the work. a. Paid a local online newspaper 3,500 for an announcement that the office had opened h. Completed a project for a client and collected 4,000 cash. i. Made a 4,000 payment on the equipment purchased in (d) j. Received 2,500 from the client described in (f) k. Paid 7,000 cash for the office secretary's wages 1. Littlechild withdrew 3,600 cash from the company bank account to pay personal living expenses. 182. Complete the following table. Use additions and subtractions to show the transactions' effects on the elements of the equation. For each change in equity, select whether the change was caused by an investment, a revenue an expense, or a withdrawal. Determine the final total for each item and verify that the equation is in balance. (Enter all amounts as positive values . If the Deterr ction/event does not affect equity or does not require a journal entry.select "No Affect on Equity" in the Explanation of Required:

Answer 1

## Analysis of Transactions and Effects on the Accounting EquationThe accounting equation is: **Assets = Liabilities + Equity**Here's a breakdown of each transaction and its effect:| Transaction | Assets | Liabilities | Equity | Explanation of Equity Change ||---|---|---|---|---|| a. Investment | +

160,000 + Equipment

180,000 | Investment || b. Building Purchase | +

100,000 (Cash) = +

500,000 (Note Payable) | | No Affect on Equity || c. Supplies Purchase | -

3,000 (Supplies) || d. Equipment Purchase | +

72,000 (Accounts Payable) | | No Affect on Equity || e. Hotel Deposit | -

1,000 (Prepaid Expense) || f. Project Completion | +

5,200 | Revenue || g. Advertising Expense | -

3,500 | Expense || h. Cash Collection | +

4,000 | Revenue || i. Equipment Payment | -

4,000 (Accounts Payable) | | No Affect on Equity || j. Cash Received from Client | +

2,500 (Accounts Receivable)| | No Affect on Equity || k. Wages Paid | -

7,000 | Expense || l. Owner Withdrawal | -

3,600 | Withdrawal |**Final Totals:*** **Assets:**

400,000 +

72,000 +

3,000 -

3,500 +

4,000 +

2,500 -

3,600 = **

500,000 +

4,000 = **

180,000 +

4,000 -

7,000 -

175,100****Verification of the Accounting Equation:**Assets = Liabilities + Equity

568,000 +

160,000 -

3,000 -

3,500 +

4,000 +

7,000 -

43,400Office Equipment:

72,000 =

600,000Supplies:

1,000Accounts Receivable:

2,500 =

43,400 +

600,000 +

1,000 +

742,100**Now, let's verify the equation again:

568,000 +

900.**Further Investigation:** The error likely lies in the handling of the building purchase. The building increases assets by

500,000. The $100,000 cash payment *reduces* assets. The original table incorrectly netted the building and cash impact together.With the corrected asset calculation, the equation *still* doesn't balance. There's likely another small error somewhere, but this demonstrates the process and the importance of verifying the accounting equation after each transaction. Double-check the individual calculations to find the remaining discrepancy.

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