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Expert-verified Found in: Page 95 ### Financial & Managerial Accounting

Book edition 7th
Author(s) John J Wild, Ken W. Shaw, Barbara Chiappetta
Pages 1096 pages
ISBN 9781259726705

# Question: The expanded accounting equation consists of assets, liabilities, common stock, dividends, revenues, and expenses. It can be used to reveal insights into changes in a company’s financial position.Required1. Form learning teams of six (or more) members. Each team member must select one of the six components, and each team must have at least one expert on each component: (a) assets, (b) liabilities, (c) common stock, (d) dividends, (e) revenues, and ( f ) expenses.2. Form expert teams of individuals who selected the same component in part 1. Expert teams are to draft a report that each expert will present to his or her learning team addressing the following:c. Using the transaction and amounts in (b), verify the equality of the accounting equation and then explain any effects on the income statement and statement of cash flows.3. Each expert should return to his/her learning team. In rotation, each member presents his/her expert team’s report to the learning team. Team discussion is encouraged.

Total assets have been increased by $19,000, liabilities by$4,000, Equity by $10,000 and Revenue by$5,000.

See the step by step solution

## Step 1: Accounting equation

The accounting equation is the horizontal form of expressing the double-entry system. Under this equation, all the assets are shown on the left side of the equation, and the liabilities and assets are shown on the right side of the equation. The sum of all assets equals the sum of all liabilities and capital.

## Step 2: Accounting equation for described transactions in (b)

 Assets = Liabilities + Equity Cash $10,000 +$5,000 Machine + $4,000 = = Accounts payable +$4,000 + Capital $10,000 Revenue +$5,000 $15,000$4,000 = $4,000$10,000 \$5,000 ### Want to see more solutions like these? 