For Each of the Following Transactions, Identify the Effects as Reflected

question 116

Essay

For each of the following transactions, identify the effects as reflected in the accounting equation. Use "+" to indicate an increase and "-" to indicate a decrease. Use "A", "L", and "E" to indicate assets, liabilities, and equity, respectively. Part A has been completed as an example. a.
$\begin{array}{llcc} \text { L. Chester inv ested \( \$ 100,000 \) in a } &\\ \text { corporation } &\underline{\quad+\mathrm{ A} \quad}& \text { \underline{\quad + \text { E } \quad}} \end{array}$

b.
$\begin{array}{llcc} \text { Land was purchased for \( \$ 50,000 \). } &\\ \text { A down payment of \( \$ 15,000 \) cash } &\\ \text { was made and a note was signed } &\\ \text { for the balance. } &\underline{\quad\quad\quad\quad}&\underline{\quad\quad\quad\quad}\\\end{array}$

c.
$\begin{array}{llcc} \text {Services were rendered to } &\\ \text { customers for cash } &\quad\quad\quad\underline{\quad\quad\quad\quad}&\underline{\quad\quad\quad\quad}\end{array}$

d.
$\begin{array}{llcc} \text { A building was purchased for } &\\ \text { cash.} &\quad\underline{\quad\quad\quad\quad}&\underline{\quad\quad\quad\quad}\\\end{array}$

e. $\begin{array}{llcc} \text {Supplies were purchased for cash. } &\underline{\quad\quad\quad\quad}&\underline{\quad\quad\quad\quad}\\\end{array}$

f. $\begin{array}{llcc} \text { Paid the office secretary's salary. } & \underline{\quad\quad\quad\quad}&\underline{\quad\quad\quad\quad}\\\end{array}$

g.
$\begin{array}{llcc} \text { The amount owed on the land } &\\ \text {from Part (b) was paid } &\underline{\quad\quad\quad\quad}&\underline{\quad\quad\quad\quad}\\\end{array}$

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Definitions:

Subchapter S

A section of the Internal Revenue Code that allows corporations to elect a special tax status which enables them to be taxed similar to a partnership, avoiding double taxation.

Voluntary Revocation

This term denotes a deliberate act of giving up or canceling a right, privilege, or license, usually in a legal or regulatory context.

Shareholders

Individuals or entities that own shares in a corporation, thus having partial ownership and potentially receiving dividends from profits.

Subchapter S

A section of the Internal Revenue Code that provides for a special tax status for qualifying small businesses, allowing income to be taxed at the shareholder level and not at the corporate level.