Exercise

E1-7 Indicate the effects of the following business transactions on the accounting equation of a proprietorship. Transaction a is answered as a guide. a. Received $50,000 cash from the owner. Answer: Increase asset (Cash) Increase owner's equity (Owner, Capital) b. Paid the current month's office rent of $4,000. c. Paid $3,500 cash to purchase office supplies. d. Performed engineering services for a client on account, $6,000. e. Purchased office furniture on account at a cost of $5,000. f. Received cash on account, $3,000. g. Paid cash on account, $2,500. h. Sold land for $50,000 cash, which was the business's cost of the land. i. Performed engineering services for a client and received cash of $6,000