Using the accounting equation to analyze business transactions

Indicate the effects of the following business transactions on the accounting equation for Shane’s Roasted Peanuts, a supplier of snack foods. Transaction (a) is answered as a guide.

a. Shane’s Roasted Peanuts received cash from the owner and gave capital to Shane.

Answer: Increase asset (Cash); Increase equity (Shane, Capital)

b. Cash purchase of land for a building site.

c. Paid cash on accounts payable.

d. Purchased equipment; signed a note payable.

e. Performed service for a customer on account.

f. Employees worked for the week but will be paid next Tuesday.

g. Received cash from a customer on accounts receivable.

h. Borrowed money from the bank.

i. Owner withdrew cash.

j. Incurred utilities expense on account.

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