Question

1. Speedy Delivery Service had the following selected transactions during April: [QUESTION HAS BEEN COMPLETED, JUST NEED ANSWERS CHECKED PLEASE]

1. Received cash from issuance of capital stock, $100,000. --> c
2. Paid rent for April, $4,200. --> e
3. Paid advertising expense, $3,000. --> e
4. Received cash for providing delivery services, $27,000. --> c
5. Purchased supplies for cash, $2,500. --> e
6. Billed customers for delivery services on account, $81,200. --> c
7. Paid creditors on account, $8,300. --> d
8. Received cash from customers on account, $25,600. --> a
9. Determined that the cost of supplies on hand was $900; therefore, $1,600 of supplies had been used during the month. --> e
10. Paid dividends, $3,000. --> e

Indicate the effect of each transaction on the accounting equation by listing the numbers identifying the transactions, (1) through (10), in a vertical column, and inserting at the right of each number the appropriate letter from the following list:

1. Increase in an asset, decrease in another asset.
2. Increase in an asset, increase in a liability.
3. Increase in an asset, increase in stockholders’ equity.
4. Decrease in an asset, decrease in a liability.
5. Decrease in an asset, decrease in stockholders’ equity.

Answer 1

Answer:

	Description	Answer
1	Received cash from issuance of capital stock, $100,000.	c
2	Paid rent for April, $4,200.	e
3	Paid advertising expense, $3,000.	e
4	Received cash for providing delivery services, $27,000.	c
5	Purchased supplies for cash, $2,500.	a
6	Billed customers for delivery services on account, $81,200.	c
7	Paid creditors on account, $8,300.	d
8	Received cash from customers on account, $25,600.	a
9	Determined that the cost of supplies on hand was $900; therefore, $1,600 of supplies had been used during the month.	e
10	Paid dividends, $3,000.	e

Explanations:

		Asset	Liability	Stockholder's equity	Explanation
1	Received cash from issuance of capital stock, $100,000.	+$100,000 cash		+$100,000 common stock	c. Increase in an asset, increase in stockholders’ equity.
2	Paid rent for April, $4,200.	-$4,200 cash		-$4,200 rent expense	e. Decrease in an asset, decrease in stockholders’ equity.
3	Paid advertising expense, $3,000.	-$3,000 cash		-$3,000 advertising exp.	e. Decrease in an asset, decrease in stockholders’ equity.
4	Received cash for providing delivery services, $27,000.	+$27,000 cash		+$27,000 revenue	c. Increase in an asset, increase in stockholders’ equity.
5	Purchased supplies for cash, $2,500.	+$2,500supplies -$2,500 cash			a. Increase in an asset, decrease in another asset.
6	Billed customers for delivery services on account, $81,200.	+$81,200 A/R		+$81,200 revenue	c. Increase in an asset, increase in stockholders’ equity.
7	Paid creditors on account, $8,300.	-$8,300 cash	-$8,300 A/P		d. Decrease in an asset, decrease in a liability.
8	Received cash from customers on account, $25,600.	+$25,600 cash -$25,600 A/R			a. Increase in an asset, decrease in another asset.
9	Determined that the cost of supplies on hand was $900; therefore, $1,600 of supplies had been used during the month.	-$1,600 cash		-$1,600 supplies expense	e. Decrease in an asset, decrease in stockholders’ equity.
10	Paid dividends, $3,000.	-$3,000 cash		-$3,000 dividends	e. Decrease in an asset, decrease in stockholders’ equity.

A/R = Accounts receivable

A/P = Accounts payable