Show the effect of each of the following transactions on the basic accounting equation, by pre­paring a table like the one in Exhibit 2-8. The fiscal year end of the company (which has been operating for several years) is December 31.
a. Consumed $1,000 of office supplies during the year. The supplies were purchased for cash the previous year.
b. Purchased $32,000 of inventory on account during the year.
c. Made sales of $60,000 during the year, of which $24,000 were cash sales.
d. Paid $36,000 owed to suppliers on accounts payable. (This included some amounts owed from the previous year.)
e. Collected $34,000 due from customers on accounts receivable. (This included some amounts due from the previous year.)
f. Paid an insurance premium of $800 on March 31 that provides coverage for the 12-month period starting April 1. The company had no insurance prior to this.
g. Determined that the cost of the inventory sold during the year was $39,000. (This included some inventory purchased the previous year.)
h. Paid $7,000 for operating expenses during the year.
i. On December 31, the company recognized the amount of insurance expense incurred during the period. (Refer to transaction "f.")
j. Recorded $3,600 of depreciation for the year on the company's equipment,
k. Declared (but did not immediately pay) dividends of $400 each quarter, for a total of $1,600.
1. By the end of the year, $1,200 of the dividends were paid.