Transaction Analysis for Year 2 in the books of Better Corp.
1. Land $5,000 Cash $5,000
2. Cash $25,000 Common stock $25,000
3. Cash $75,000 Services Revenue $75,000
4. Operating expenses $42,000 Cash $42,000
5. Cash $10,000 Bank Note Payable $10,000
6. Dividends $5,000 Cash $5,000
7. No effect
Effect of Each Transaction on the Accounting Equation:
Transaction Accounting Equation
Assets = Liabilities + Stockholders Equity
1. $5,000 -$5,000 = $0 + $0
2. $25,000 = $0 + $25,000
3. $75,000 = $0 + $75,000
4. -$42,000 = $0 + -$42,000
5. $10,000 = $10,000 + $0
6. -$5,000 = $0 + -$5,000
$63,000 = $10,000 + $53,000
Thus, the accounting equation shows that assets are equal to liabilities and equity.
Learn more about the accounting equation at brainly.com/question/23920579
