1. Consider how shareholder contributions of $100,000 (to form the corporation) affect the following cash- and accrual basis accounting equations, respectively Assets Resources Cash - Cash-Basis Claims against Resources Contributed Capital + Farned Capital 1 Assets Resources Cash Inventory Cash Inventory Cash Inventory Accrual-Basis Claims against Resources Liabilities + Shareholders' Equity Liabilities + Contributed Capital + Earned Capital Accounts Payable + Contributed Capital Revenues Expenses 2. In addition to the previous transaction, assume that the corporation purchases inventory for $10.000 on credit, then immediately sells 58.000 of the inventory to customers for $12,000 cash. How do these transactions affect the cash- and accrual-basis accounting equations? Resources Assets Cash - Cash-Basis Claims against Resources Contributed Capital Earned Capital Contributed Capital + Revenues (+) Expenses Transaction Description Owner contribution Inventory purchase Sale of inventory Totals Accrual-Basis Resources Assets Cash Inventory Liabilities Accounts Payable Claims against Resources Contributed Capital + Contributed Capital = + Earned Capital Revenues (+) Expenses Transaction Description Owner contribution Inventory purchase Sale of inventory Totals