The Marchetti Soup Company entered into the following transactions during the month of June: (1) purchased inventory on account for $150,000 (assume Marchetti uses a perpetual inventory system); (2) paid $41,000 in salaries to employees for work performed during the month; (3) sold merchandise that cost $122,000 to credit customers for $205,000; (4) collected $185,000 in cash from credit customers; and (5) paid suppliers of inventory $130,000.

Analyze each transaction and show the effect of each on the accounting equation for a corporation

Assets = Liabilities + Paid in Capital + Retained earnings

1.

2.

3.

4.

5