please see attached - thank you in advance ### Business Transactions and Accounting Equations for Elaine's Inflatables**Elaine's Inflatables** earns service revenue by providing party planning services and inflatable playscapes. Elaine's Inflatables is organized as a sole proprietorship and owned by Elaine Gibson. During the past month, Elaine's Inflatables has the following transactions:#### Transactions:**Transaction (a) is answered as a guide.****Indicate the effects of the business transactions on the accounting equation for Elaine's Inflatables.** Use the following accounts:- Cash- Accounts Receivable- Supplies- Equipment- Accounts Payable- Gibson, Capital- Gibson, Withdrawals- Service Revenue- Wages Expense- Rent Expense- Utilities Expense---#### Transactions:**a. Gibson contributed $10,000 to the business in exchange for capital.***Increase asset (Cash); Increase equity (Gibson, Capital)***b. Purchased equipment for $5,000 on account.***Increase asset (Equipment); Increase liability (Accounts Payable)*---### Transaction Explanation:**a.** When Gibson contributes $10,000 to the business, it increases the company's cash (an asset) by $10,000. Simultaneously, it increases Gibson's equity (Capital) in the business by $10,000.- **Increase asset (Cash):** $10,000- **Increase equity (Gibson, Capital):** $10,000**b.** When the company purchases equipment for $5,000 on account, it increases the company's equipment (an asset) by $5,000. At the same time, it increases the company's liabilities (Accounts Payable) by $5,000, as the equipment is bought on account.- **Increase asset (Equipment):** $5,000- **Increase liability (Accounts Payable):** $5,000### Diagram Explanation (Hypothetical Example):If there was a diagram for this explanation, it might look like this:- **Equation Before Transactions:** - Assets = Liabilities + Owner’s Equity - $0 = $0 + $0 - **After Transaction (a):** - Assets = Liabilities + Owner’s Equity - $10,000 = $0 + $10,000 - **After Transaction (b):** - Assets = Liabilities +

As per accounting equation in business, Total assets should be equal to total liabilities and…

Elaine's Inflatables earns service revenue by providing party planning services and inflatable playscapes. Elaine's Inflatables is organized as a sole proprietorship and owned by Elaine Gibson. During the past month, Elaine's Inflatables has the following transactions: A (Click the icon to view the transactions.) Indicate the effects of the business transactions on the accounting equation for Elaine's Inflatables. Transaction (a) is answered as a guide. Use the following accounts: Cash; Accounts Receivable; Supplies; Equipment; Accounts Payable; Gibson, Capital; Gibson, Withdrawals; Service Revenue, Wages Expense, Rent Expense, and Utilities Expense. a. Gibson contributed $10,000 to the business in exchange for capital. (Transaction (a) is answered as a guide.) a. Increase asset (Cash) Increase equity (Gibson, Capital) b. Purchased equipment for $5,000 on account. b.

Elaine's Inflatables earns service revenue by providing party planning services and inflatable playscapes. Elaine's Inflatables is organized as a sole proprietorship and owned by Elaine Gibson. During the past month, Elaine's Inflatables has the following transactions: A (Click the icon to view the transactions.) Indicate the effects of the business transactions on the accounting equation for Elaine's Inflatables. Transaction (a) is answered as a guide. Use the following accounts: Cash; Accounts Receivable; Supplies; Equipment; Accounts Payable; Gibson, Capital; Gibson, Withdrawals; Service Revenue, Wages Expense, Rent Expense, and Utilities Expense. a. Gibson contributed $10,000 to the business in exchange for capital. (Transaction (a) is answered as a guide.) a. Increase asset (Cash) Increase equity (Gibson, Capital) b. Purchased equipment for $5,000 on account. b.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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