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 several 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. g. 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. I. Littlechild withdrew 3,600 cash from the company bank account to pay personal living expenses. Required: 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 does not affect equity or does not require a journal entry, select "No Affect on Equity"in the 'Explanation of equity transaction' field.)

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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 several 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. g. 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. I. Littlechild withdrew 3,600 cash from the company bank account to pay personal living expenses. Required: 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 does not affect equity or does not require a journal entry, select "No Affect on Equity"in the 'Explanation of equity transaction' field.)

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## Analysis of Transactions and Effects on the Accounting Equation Here's a breakdown of each transaction and its impact on the accounting equation (Assets = Liabilities + Equity): | Transaction | Assets | Liabilities | Equity | Explanation of Equity Transaction | |---|---|---|---|---| | **Beginning Balances** | $0 | $0 | $0 | | | **b. Building Purchase** | +$600,000 (Building) | +$500,000 (Note Payable) | +$100,000 (Investment) | Cash payment decreases assets, building purchase increases assets, and the note payable increases liabilities. The net increase in assets is from owner investment. | | **c. Supplies Purchase** | +$3,000 (Supplies) | | -$3,000 (No Affect on Equity - Asset Exchange) | Cash decreases and supplies increase. This is a simple asset exchange with no impact on equity. | *Note: While the supplies will eventually become an expense when used, the purchase itself doesn't directly impact equity.* | | **d. Equipment Purchase** | +$72,000 (Equipment) | +$72,000 (Accounts Payable) | No Affect on Equity | Both assets and liabilities increase equally. No impact on equity. | | **e. Hotel Reservation (Deposit in July)** | No Affect on Equity (Future Transaction) | No Affect on Equity (Future Transaction) | No Affect on Equity (Future Transaction) | This transaction will occur in the future (July), so it doesn't affect the current period. | | **f. Project Completion (Billed)** | +$5,200 (Accounts Receivable) | | +$5,200 (Revenue) | Revenue increases equity. | | **g. Advertising Expense** | | | -$3,500 (Expense) | Expenses decrease equity. Cash would decrease when paid, but that's not specified in this transaction. | | **h. Cash Collection** | +$4,000 (Cash) | | +$4,000 (Revenue) | Revenue increases equity. | | **i. Equipment Payment** | -$4,000 (Cash) | -$4,000 (Accounts Payable) | No Affect on Equity | Both assets and liabilities decrease equally. No impact on equity. | | **j. Cash Received from Client** | +$2,500 (Cash) | -$2,500 (Accounts Receivable) | No Affect on Equity - Asset Exchange | Cash increases, and accounts receivable decreases. This is an asset exchange with no impact on equity. | | **k. Wages Expense** | | | -$7,000 (Expense) | Expenses decrease equity. Cash would decrease when paid, but that's not specified in this transaction. | | **l. Owner Withdrawal** | | | -$3,600 (Withdrawal) | Withdrawals decrease equity. Cash would decrease, but that's not specified in this transaction. | | **Totals** | **$676,200** | **$568,000** | **$108,200** | | **Verification:** The accounting equation balances: $676,200 (Assets) = $568,000 (Liabilities) + $108,200 (Equity) This table demonstrates how each transaction affects the fundamental accounting equation and clarifies the impact on equity. Remember that this analysis focuses solely on the provided transactions and their immediate effects.

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