1-3 Application Problem: Determining how transactions change an accounting equation L04,5 Bethany Hartman is starting Hartman's Lawn Service, a small service business. Hartman's uses the accounts shown the following equation. Use the form in your Working Papers to complete this problem. Assets + Owner's Equity Trans. No. Liabilities Accts. Pay.- Accts. Pay.- Hickman Knapp Co. + Mowing Bethany Hartman, + Beg. Bal. Prepaid Cash + Supplies + Insurance = 0 +5,000 5,000 0 +5,000 New Bal. 5,000 Instructions: For each transaction, complete the following. Transaction 1 is given as an example. a. Analyze the transaction to determine which accounts in the accounting equation are affected. b. Write the amount in the appropriate columns using a plus sign (+) if the account increases or a minus sign (-) if th account decreases. c. Calculate a new balance for each transaction in the accounting equation. d. Before going on to the next transaction, determine that the accounting equation is still in balance. Transactions: 1. Received cash from owner as an investment, $5,000.00 2. Paid cash for insurance, $1,800.00 3. Bought supplies on account from Hickman Mowing, $700.00. 4. Bought supplies on account from Knapp Co., $200.00. 5. Paid cash on account to Hickman Mowing, $300.00. 6. Paid cash for supplies, $100.00. 7. Paid cash on account to Knapp Co., $100.00. 8. Received cash from owner as an investment, $1,000.00 1-4 Application Problem: Determining how revenue, expense, and with transactions change an accounting equation L04,5,6 ography uses the accounts Shannon O'Bryan operates a service business called Edgecliff Photography, Edgecliff Photography uses shown in the following accounting equation. Use the form in your Working Papers to complete this problem Liabilities + Owner's Equity Trans. No. Assets = Accts. Rec.- Eden Wedding Prepaid Planners + Supplies + Insurance - 300 + Cash 725 Accts. Pay. Shutter Supplies + 200 Shannon O'Bryan Capital 1,025 -400 (expense) 625 Beg. Bal 200 -400 200 New Bal 200 300 Instructions: For each transaction, complete the following. Transaction 1 is given as an example, a. Analyze the transaction to determine which accounts in the accounting equation are affected. b. Write the amount in the appropriate columns using a plus sign (+) if the account increases or a minus sign (-) if the account decreases