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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 in exchange for capital stock, $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, Stockholders' Equity Capital Stock, Dividends, Revenue, and Expense). Also indicate the specific item within the accounting equation element that is affected. To illustrate, the answer to (1) is shown below.
(1) Asset (Cash) increases by $18,000; Stockholders' Equity (Capital Stock) increases by $18,000.
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