INFERRING EVENTS FROM BALANCE SHEET CHANGES. Each of the following balance sheet changes is associated with a particular event:

a) Cash increases by $100,000 and capital stock increases by $100,000.

b) Cash decreases by $22,000 and land increases by $22,000.

c) Cash decreases by $9,000 and retained earnings decreases by $9,000.

d) Cash increases by $15,000 and notes payable increases by $15,000.

REQUIRED:

Describe the four events associated with the balance sheet changes listed above.

1-49. TRANSACTION ANALYSIS. Analyze the effect of the following transactions on the accounting equation. Use the format shown in item a.

a) Paid $5,000 cash for land.
Answer: Increase assets (land), $5,000 Decrease assets (cash), $5,000

b) Performed consulting services for a client in exchange for $1,200 cash.

c) Performed consulting services for a client on account, $700.

d) Stockholders invested $12,000 cash in the business.

e) Purchased office supplies on account, $300.

f) Collected $500 from client in transaction e.
g) Paid $250 on account for supplies purchased in transaction e.
h) Paid $200 cash for the current month’s rent.
i) Paid stockholders a $1,000 cash dividend.