Answer:
The detailed effect of each transaction of P&L, BS and cashflow statements are mentioned below;
Explanation:
2- Receives $700 cash for services provided: Income: +700, Total Assets: +700 and Operating Cash: +700
3- Pays $500 cash for employee wages: Income: -500, Total Assets: -500 and operating cash: -500
4- Incurs $100 legal costs on credit: Income: -100, Total liabilities: +100 and operating cash: +100
5- Purchases $200 of supplies on credit: Income: -200, total liabilities: -200 and operating cash: +200
6- Buys equipment for $300 cash: Income: -300, total assets: -300 and operating cash: -300
7- Pays $200 on accounts payable: Total liabilities: -200, operating cash: -200
8- Provides $400 services on credit: Income: +400, total liabilities: +400 and operating cash: +400
9- Pays $50 cash for dividends: Total Assets: -50 and financing cashflow: -50
10- Collects $400 cash on accounts receivable: total assets: +400, operating cash: +400
The attached photo displays the Effects o Transactions on Financial Statements.
From the attached, we have the following:
Total Assets = $1,550
Total Liabilities = $100
Total Equity = $1,450
Total Net Income = $600
Total Operating Activities = $400
Total Investing Activities = -$300
Total Financing Activities = $850
Based on the above, the accounting equation can be confirmed as follows:
Total Assets = Total Liabilities + Total Equity = $100 + $1,450 = $1,550
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