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    The Effects on the Accounting Equation

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    Jane Dow opens an apartment-location business near a college campus. She has a sole proprietorship. During the first month of operation, she has the following transactions. Note the effect on the accounting equation (credits/debits) for each. Be sure to list each specific account impacted:

    a. She invests $35,000 of personal funds to start the business
    b. She purchases office supplies, on account, costing $350
    c. She pays cash of $30,000 to acquire a lot. She plans to use the lot as a future site for her business office.
    d. She locates apartments for clients and receives cash of $1,900.
    e. She pays $100 on the account payable she created in transaction B.
    f. She pays cash expenses for office rent of $400 and utilities of $100
    g. She withdraws cash in the amount of $1200 for personal use.

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    Solution Summary

    The effect on the accounting equation for several transactions are analyzed.

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