Seatech Corporation had the following transactions during the month. Indicate th

ID: 2393984 • Letter: S

Question

Seatech Corporation had the following transactions during the month. Indicate the effect of each transaction on Assets, Liabilities, and Equity. (Put the amount of the change in the blank. Use a negative (-) sign to show a decrease and put a zero if the item was not affected.) A) The owner starts the company by contributing $5,000 cash to the company in exchange for common stock. How does this affect the accounting equation? Assets Liabilities Equity B) The Company purchases a truck by signing a note payable for $10,200. How does this affect the accounting equation? Assets Liabilities Equity C) The Company purchases $1,900 of supplies for cash. How does this affect the accounting equation? Assets Liabilities Equity D) The Company purchases $3,300 of supplies on account. How does this affect the accounting equation? Assets Liabilities Equity E) The Company pays $1,600 on the account owed for the supplies. How does this affect the accounting equation? Assets Liabilities Equity

Explanation / Answer

Seatech Corporation

Statement showing the effect of above transactions on the balance sheet:

Assets

Liabilities

Equity

Cash $5000

$5,000

Truck $10,200

Accounts Payable $10,200

Cash -$1,900

Supplies $1,900

Supplies $3,300

Accounts Payable $3,300

Cash -$1,600

Accounts Payable -$1,600