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2 February, 17:07

The following transactions occur for Badger Biking Company during the month of June:

(a) Provide services to customers on account for $50,000.

(b) Receive cash of $42,000 from customers in (a) above.

(c) Purchase bike equipment by signing a note with the bank for $35,000.

(d) Pay utilities of $5,000 for the current month.

Analyze each transaction and indicate the amount of increases and decreases in the accounting equation.

Assets = Liabilities + Stockholder's equity

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  1. 2 February, 18:57
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    Analyze each transaction and indicate the amount of increases and decreases in the accounting equation.

    Assets = Liabilities + Stockholder's equity

    Explanation:

    (a) Provide services to customers on account for $50,000.

    Account receivable=equity (net income (revenue)

    50000=50000

    (b) Receive cash of $42,000 from customers in (a) above.

    Cash = - (account receivable)

    (c) Purchase bike equipment by signing a note with the bank for $35,000.

    equipment=account payable

    (d) Pay utilities of $5,000 for the current month.

    -cash=-equity (expenses)
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