Interstate Delivery Service is owned and operated by Katie Wyer. The following selected transactions were completed by Interstate Delivery Service during May: 1. Received cash from owner as additional investment, $18,000. 2. Paid advertising expense, $4,850. 3. Purchased supplies on account, $2,100. 4. Billed customers for delivery services on account, $14,700. 5. Received cash from customers on account, $8,200. Indicate the effect of each transaction on the accounting equation elements (Assets, Liabilities, Owner’s Equity, Drawing, Revenue, and Expense). Also indicate the specific item within the accounting equation element that is affected. To illustrate, the answer to (1) follows: (1) Asset (Cash) increases by $18,000; Owner’s Equity (Katie Wyer, Capital) increases by $18,000.

BuyFind

Financial Accounting

14th Edition
Carl Warren + 2 others
Publisher: Cengage Learning
ISBN: 9781305088436
BuyFind

Financial Accounting

14th Edition
Carl Warren + 2 others
Publisher: Cengage Learning
ISBN: 9781305088436

Solutions

Chapter
Section
Chapter 1, Problem 3PEB
Textbook Problem

Interstate Delivery Service is owned and operated by Katie Wyer. The following selected transactions were completed by Interstate Delivery Service during May:

  1. 1. Received cash from owner as additional investment, $18,000.
  2. 2. Paid advertising expense, $4,850.
  3. 3. Purchased supplies on account, $2,100.
  4. 4. Billed customers for delivery services on account, $14,700.
  5. 5. Received cash from customers on account, $8,200.

Indicate the effect of each transaction on the accounting equation elements (Assets, Liabilities, Owner’s Equity, Drawing, Revenue, and Expense). Also indicate the specific item within the accounting equation element that is affected. To illustrate, the answer to (1) follows:

  1. (1) Asset (Cash) increases by $18,000; Owner’s Equity (Katie Wyer, Capital) increases by $18,000.

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Chapter 1 Solutions

Financial Accounting
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