The following transactions occurred at several different businesses and are not related.

INSTRUCTIONS

Analyze each of the transactions. For each transaction, set up T accounts. Record the effects of the transaction in the T accounts. Use plus and minus signs to show the increases and decreases.

TRANSACTIONS

1. A firm purchased equipment for $32,000 in cash.

2. The owner, Gloria Bahamon, withdrew $8,000 cash.

3. A firm sold a piece of surplus equipment for $6,000 in cash.

4. A firm purchased a used delivery truck for $24,000 in cash.

5. A firm paid $7,200 in cash to apply against an account owed.

6. A firm purchased office equipment for $10,000. The amount is to be paid in 60 days.

7. Kevin Fralicks, owner of the company, made an additional investment of $40,000 in cash.

8. A firm paid $3,000 by check for office equipment that it had previously purchased on credit.

Analyze: Which transactions affect liability accounts?