Question

The Marchetti Soup Company entered into the following transactions during the month of June: (1) purchased inventory on account for $230,000 (assume Marchetti uses a perpetual inventory system); (2) paid $57,000 in salaries to employees for work performed during the month; (3) sold merchandise that cost $154,000 to credit customers for $285,000; (4) collected $265,000 in cash from credit customers, and (5) paid suppliers of inventory $210,000. Analyze each transaction and show the effect of each on the accounting equation for a corporation. (Amounts to be deducted should be indicated by a minus sign. Enter the net change on the accounting equation.) Answer is not complete. = + + Assets 230,000 Paid-in capital 0 Retained Earnings (1) $ Liabilities $ 230,000 0 0 (2) 0 0 (3) 0

Can You please help me to finish this assignment? 2,3,4,5

Answer 1

	Assets	=	Liabilities	+	Paid In Capital	+	Retained Earnings
1	230000		230000		0		0
2	-57000		0		0		-57000
3	131000		0		0		131000
4	0		0		0		0
5	-210000		-210000		0		0

Detailed reasoning

1. Inventory (Asset) will increase by $230000 and Accounts payable (liability) will increase by $230000

2. Wage Expenses will increase (Retained Earnings will go down) by $57000 and Cash (Asset) will decrease by $57000.

3. Asset will increase by $131000 (as Accounts receivable will increase by $285000 and Finished goods will be decreased by $154000) and retained earnings will increase by $131000(Sales- Cost of Goods sold)

4. Cash (Asset) will increase by $ 265000 and Accounts receivable (Asset) will decrease by $265000, and therefore the net impact will be Zero

5. Accounts payable (liability) will decrease by $210000 and Cash (Asset) will be decrease by $210000