Reference no: EM132679303
Problem - The following selected transactions were completed by Speedy Delivery Service during October:
1. Received cash in exchange for capital stock, $30,000.
2. Purchased supplies for cash, $1,500.
3. Paid rent for October, $4,000.
4. Paid advertising expense, $2,500.
5. Received cash for providing delivery services, $18,750.
6. Billed customers for delivery services on account, $41,500.
7. Paid creditors on account, $6,000.
8. Received cash from customers on account, $26,200.
9. Determined that the cost of supplies on hand was $250; therefore, $1,250 of supplies had been used during the month.
10. Paid cash dividends, $2,000.
Indicate the effect of each transaction on the accounting equation by listing the numbers identifying the transactions, (1) through (10), in a column, and inserting at the right of each number the appropriate letter from the following list:
a. Increase in an asset, decrease in another asset.
b. Increase in an asset, increase in a liability.
c. Increase in an asset, increase in stockholders' equity.
d. Decrease in an asset, decrease in a liability.
e. Decrease in an asset, decrease in stockholders' equity.
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