Chapter 1 The Nature and Purpose of Accounting 21 Problem 1-4. An analysis of the transactions made by Acme Consulting for the month of July is shown below. Cash + = Accounts Receivable + Supplies + Equipment Inventory Accounts Payable + Owners' Equity +$20,000 Description of Transaction Investment +$7,000 +$2,000 +$1,000 -$ 4,500 +$10,000 Salaries Revenues +$5,000 1. +$ 20,000 2. -$ 5,000 3. -$ 1,000 4. -$ 4,500 5. +$ 5,000 6. -$ 7. +$ 1,000 8. -$ 750 9. - $ 500 10. 11. -$1,500 -$1,000 $ -$ $ - $ 750 500 200 200 Rent Utilities Travel +$ 200 - $ 200 Required: a. Explain each transaction. b. List the changes in the company's balance sheet during the month of July. c. Prepare an income statement for the month (ignore taxes). d. Explain the changes in the Cash account. e. Explain why the change in the Cash account and the month's income are not the same. Problem 1-5