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The following transactions occur for Badger Biking Company during the month of June: a. Provide services to customers on account for $49,000. b. Receive cash of $41,000 from customers in (a) above. c. Purchase bike equipment by signing a note with the bank for $34,000. d. Pay utilities of $4,900 for the current month. Analyze each transaction and indicate the amount of increases and decreases in the accounting equation. (Decreases to account classifications should be entered as a negative.)
The following transactions occur for Badger Biking Company during the month of June: a. Provide services to customers on account for $49,000. b. Receive cash of $41,000 from customers in (a) above. c. Purchase bike equipment by signing a note with the bank for $34,000. d. Pay utilities of $4,900 for the current month. Analyze each transaction and indicate the amount of increases and decreases in the accounting equation. (Decreases to account classifications should be entered as a negative.)
Final answer:Each transaction would affect the accounting equation in different ways. Transaction a: Increase in Assets and Equity. Transaction b: No net impact on Assets, No impact on Liability and Equity. Transaction c: Increase in both Assets and Liabilities. Transaction d: Decrease in Assets and Equity.Explanation:In the case ofBadger Biking Company,each transaction has an effect on the accounting equation: Assets = Liabilities + Equity. The first transaction,a. providing services to customers on account for $49,000 conveniently results in an increase in Accounts Receivable(a part of assets) and also increase in Revenue (a part of equity).With the second transaction,b. receiving $41,000 in cash from customers, there is an increase in Cash (a type of asset) and a decrease in Accounts Receivable (also an asset) because the customers have paid off part of what they owe. The net effect on the assets equation is therefore zero. There's no effect on Liability and Equity in this case.The third transaction, c. purchasing bike equipment by signing a note with the bank for $34,000 is an increase in both assets (Equipment) and liabilities (Notes Payable).Finally, the fourth transaction, d. paying utilities of$4,900for the current month, results in a decrease in assets (less cash) and a decrease in equity because Utilities Expense has increased.Learn more about Accounting Equation here:brainly.com/question/33441178#SPJ4...