Question

Complete the following chart for the selected transactions for

Martha's MuffinsMartha's Muffins

shown below.

a.	MarthaMartha invests ​$10 comma 00010,000 cash into a business known as Martha's MuffinsMartha's Muffins.
b.	MarthaMartha purchases baking supplies on account for ​$500500.
c.	MarthaMartha receives and pays the​ kitchen's utilities bill amounting to ​$425425.
d.	Sales revenue for the current period amounts to ​$2 comma 0002,000 ​(all revenue transactions involved​ cash).
e.	MarthaMartha purchases a new fridge for ​$3 comma 5003,500 cash.

​(If a box is not used in the transaction leave the box​ empty; do not enter a zero. Use a minus sign or parentheses for decreases. If a transaction only affects one side of the accounting​ equation, enter the positive value on the first​ line.)

	Assets	Liabilities	Owners' Equity
a.	10,000		10,000

Answer 1

	Assets	Liabilities	Owner's Equity	Explanation(s)
a	$10,000	$0	$10,000	Capital balance will increase by the amount of cash invested.
b	$500	$500	$0	Supplies (Asset) will increase with Accounts payable (liabilities)
c	($425)	$0	($425)	Utilities expense will decrease Net Income and hence decrease equity
d	$2,000	$0	$2,000	Revenue will increase net income and hence increase Equity
e	0 [3500 equipment - 3500 cash paid]	$0	$0	Increase in asset will be equal to decrease in asset.