The following events occurred for Parker Company.
a. Performed consulting services for a client in exchange for $3,200 cash.
b. Performed consulting services for a client on account, $1,700.
c. Paid $30,000 cash for land.
d. Purchased office supplies on account, $900.
e. Paid a $2,500 cash dividend to stockholders.
f. Paid $550 on account for supplies purchased in Transaction d.
g. Paid $800 cash for the current month's rent.
h. Collected $1,500 from client in Transaction b.
i. Stockholders invested $20,000 cash in the business.
Required:
1. Analyze the effect of each transaction on the accounting equation. For example, if salaries of $500 were paid, the answer would be ''Decrease in stockholders' equity (expense) $500 and decrease in assets (cash) $500.''
2. For Event d, what accounting principle did you use to determine the amount to be recorded for supplies?