Use the accounting equation to show the effects of each of the following transactions on the firm’s balance sheet:

1. Purchased $250,000 of inventory on account.

2. Paid creditors $125,000 on account.

3. Purchased $200,000 of inventory on account at a 2% discount.

4. Paid creditors the amount due from transaction 3. 5. Purchased $300,000 of inventory, half for cash, half on account. 6. Paid creditors the amount due from transaction 5. 7. Purchased $400,000 of inventory all at a 3% discount, half on account, half for cash. P-968