Better Corp. completed the following transactions during Year 2: Purchased land for $5,000 cash. Acquired $25,000 cash from the issue of common stock. Received $75,000 cash for providing services to customers. Paid cash operating expenses of $42,000. Borrowed $10,000 cash from the bank. Paid a $5,000 cash dividend to the stockholders. Determined that the market value of the land purchased in event 1 is $35,000.

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anthougo anthougo · Answer 1 · 2021-09-08T10:50:13+02:00

Transaction Analysis for Year 2 in the books of Better Corp.

1. Land $5,000 Cash $5,000

2. Cash $25,000 Common stock $25,000

3. Cash $75,000 Services Revenue $75,000

4. Operating expenses $42,000 Cash $42,000

5. Cash $10,000 Bank Note Payable $10,000

6. Dividends $5,000 Cash $5,000

7. No effect

Effect of Each Transaction on the Accounting Equation:

Transaction Accounting Equation

Assets = Liabilities + Stockholders Equity

1. $5,000 -$5,000 = $0 + $0

2. $25,000 = $0 + $25,000

3. $75,000 = $0 + $75,000

4. -$42,000 = $0 + -$42,000

5. $10,000 = $10,000 + $0

6. -$5,000 = $0 + -$5,000

$63,000 = $10,000 + $53,000

Thus, the accounting equation shows that assets are equal to liabilities and equity.

Learn more about the accounting equation at brainly.com/question/23920579