The following transactions occurred during March 2021 for the Wainwright Corporation. The company owns and operates a wholesale warehouse. Issued 22,000 shares of common stock in exchange for $220,000 in cash.
Purchased equipment at a cost of $24,000. $6,000 cash was paid and a notes payable to the seller was signed for the balance owed.
Purchased inventory on account at a cost of $68,000. The company uses the perpetual inventory system.
Credit sales for the month totaled $80,000. The cost of the goods sold was $48,000.
Paid $3,250 in rent on the warehouse building for the month of March.
Paid $5,350 to an insurance company for fire and liability insurance for a one-year period beginning April 1, 2021.
Paid $48,000 on account for the merchandise purchased in 3.
Collected $36,000 from customers on account.
Recorded depreciation expense of $600 for the month on the equipment.
Required:
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.)
Paid-In Capital Retained Earnings Assets Liabilities + 220,000 1 220,000 2. 3 4. 5 6 7. 8 9 LC

Assets = Liabilities + Stockholders’ Equity = $286,150

Explanation:

Note: See the attached excel file for the Analysis of the Effect of March 2021 on the Accounting Equation.

From the attached excel file, the following can be obtained:

Assets = Total assets = $193,400 + $23,400 + $20,000 + $44,000 + $5,350 = $286,150

Liabilities = Total liabilities = $18,000 + $20,000 = $38,000

Stockholders’ Equity = Total Stockholders’ Equity = $220,000 + $28,150 = $248,150

Liabilities + Stockholders’ Equity = $38,000 + $248,150 = $286,150

Therefore, the accounting equation holds as follows:

Assets = Liabilities + Stockholders’ Equity = $286,150

of the three mortgage options that demarco and tanya have to choose from, the balloon payment mortgage would be their best option, over adjustable payment and fixed payment plans.ultimately, the balloon payment plan would save demarco and tanya overall, in interest, would cost less monthly, and they would only have to make these payments for 8 years, opposing to 30 years for adjustable or fixed payment plans. 

overall, demarco and tanya would save $80,811 if they chose balloon payments over fixed payments, and would save $116,711 if they choose balloon payments over adjustable payments. benefits with choosing fixed payments over adjustable payments is that, in the end, the payments will still be $836.30 a month, while with adjustable payments, the initial monthly payments will be $763.38 to $1082.70 a month, ultimately leading to a more costly purchase. benefits with choosing fixed payments over balloon payments are not present. benefits in choosing adjustable payments over is that it has a lower interest rate, and starts with lower monthly payments initially. benefits in choosing adjustable payments over balloon payments include a lower interest rate, and lower initial monthly payments. benefits in choosing balloon payments over fixed payments include lower interest rates, lower overall price, lower monthly payments, takes less time to pay off, and does not require a downpayment. benefits in choosing balloon payments over adjustable payments include, lower monthly payments (when averaged), takes less time to pay off, and lower overall price.

hence, option c, balloon payments, is the best option for demarco and tanya to make this purchase, for it will save them a minimum of $80811, and a maximum of $116,711.