The following transactions occur for Badger Biking Company during the month of June: Provide services to customers on account for $31,000.
Receive cash of $23,000 from customers in (a) above.
Purchase bike equipment by signing a note with the bank for $16,000.
Pay utilities of $3,100 for the current month.
Analyze each transaction and indicate the amount of increases and decreases in the accounting equation.
Transaction Assets = Liabilities + Stockholder's Equity
a)
b)
c)
d)

Assets                                                 = Liabilities         + Stockholders' equity

Accounts receivable $31,000(+)                                    Revenue  $31,000(+)

Cash                            $23000 (+)

Accounts receivable $23,000(-)

Bike  equipment        $16,000(+)     notes payable $16,000(+)

Cash                           $3,100(-)                               retained earnings$3,100(-)

Explanation:

The first transaction increases assets (accounts receivable) by $31000 while revenue (stockholders' equity) increased by the same amount

The cash receipt of $23,000 increases asset cash by $23,000 and decreases an asset, accounts receivable by the same amount.

The purchase of an asset by notes payable increases asset, bike equipment by $16,000, while liabilities(notes payable) also increases by $16,000

The payment of utilities for $3,100 decreases asset (cash) by $3,100 while stockholders equity (retained earnings) decreases by same amount.

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