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Problem 1: For each of the following unrelated situations, determine the financial statement effect using the Transaction Analysis Template:
a. Equipment purchased at the beginning of the month for $31,200 on account has an estimated useful life of 4 years. One-month's depreciation on the equipment is unrecorded.
b. An estimated utilities expense of $1,235 has been incurred in the current month, but the utility bill has not been received.
c. On the first day of the current month, payment was made for four months rent in advance in the amount of $31,200. Monthly statements are now being prepared.
d. Taylor Medical Equipment provides medical equipment for rent. A local nursing home pays $21,840 in advance for three-months rental rental of hospital beds. At the end of the current period, one month has passed.
How do Indicate the effects of each of the transactions on the elements of the company's financial statements. Purchased merchandise on account.
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