Reference no: EM132738570
Problem - The following selected transactions were completed by Cota Delivery Service during July:
Received cash in exchange for common stock, $35,000.
Purchased supplies for cash, $1,100.
Paid rent for October, $4,500.
Paid advertising expense, $900.
Received cash for providing delivery services, $33,000.
Billed customers for delivery services on account, $58,000.
Paid creditors on account, $2,900.
Received cash from customers on account, $27,500.
Determined that the cost of supplies on hand was $300 and $8,600 of supplies had been used during the month.
Paid cash dividends, $2,500.
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.