Answer:
The Accounting Equation is: Assets = Liabilities + Stockholders' Equity. Thus, we will see how each transaction affects liabilities, assets, or, stockholders' equity.
a. Provide services to customers on account for $32,000.
Service revenue: $32,000 to stockholders equity.
Accounts receivable: $32,000 to assets.
b. Receive cash of $24,000 from customers in (a) above.
Cash: $24,000 to assets.
Accounts Receivable: ($24,000) to assets.
c. Purchase bike equipment by signing a note with the bank for $17,000.
Equipment: $17,000 to assets.
Accounts payable: $17,000 to liabilities.
d. Pay utilities of $3,200 for the current month.
Uitlities expense: ($3,200) to stockholders equity.
Cash: ($3,200) to assets.
