86. Indicate how each of the following transactions will affect the balance sheet equation.A) Company purchases $10,000 worth of goods on credit.B) Company signs a lease and pays the first month's...

86. Indicate how each of the following transactions will affect the balance sheet equation.


A) Company purchases $10,000 worth of goods on credit.
B) Company signs a lease and pays the first month's rent of $750.
C) Company pays $500 for an ad that appears in the local newspaper.
D) Company sells $15,000 worth of goods during the first month; $12,000 for cash and $3,000 on credit.
E) Company pays $10,000 for the goods bought in A).
F) Company collects $2,000 of the amount owing from customers.
G) Owner pays herself a $500 dividend from the first month's earnings.

87. The transactions for October, the first month of operation, for Paul's Pet Services are summarized below.


1) Paul invested $5,000 of cash, and equipment and furniture worth $2,400 for shares.
2) Paid $1,000 for first month's rent.
3) Paid $500 for advertising and promotion.
4) Received $180 from a client for 6 monthly grooming appointments for a dog. Paul performed the grooming for October.
5) Bought $2,000 worth of inventory for the store and paid immediately.
6) During the month sold 60% of the initial inventory for $2,400 cash.
7) Purchased another $1,000 worth of inventory, to be paid on November 25^th.
8) Estimated that the equipment and furniture would last six years before needing to be replaced or upgraded.


Required:


A) Use the accounting equation spreadsheet given to record the transactions. You may add columns to the equation to represent accounts.
B) Prepare the income statement for the month and the balance sheet as at October 31^st.