Question

1. Transactions

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

   Select the accounting equation elements (Assets, Liabilities, Owner's Equity) affected by the transaction. Then, in the "Direction" column, select the impact ("Increases" or "Decreases") on the accounting equation element. Lastly, select the specific account 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.

   		Element	Direction	Item
   1.	Received cash from owner as additional investment, $18,000.	Asset Owner's Equity	Increases Increases	Cash Katie Wyer, Capital
   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.

Answer 1

		Element	Direction	Item
1	Received cash from owner as additional investment, $18,000	Assets	Increase	Cash
Owner's Equity	Increase	Katie Wyer, Capital
2	Paid advertising expense, $4,850	Owner's Equity	Decrease	Advertising expense
Assets	Decrease	Cash
3	Purchased supplies on account, $2,100	Assets	Increase	Supplies
Liabilities	Increase	Accounts payable
4	Billed customers for delivery services on account, $14,700	Assets	Increase	Accounts receivable
Owner's Equity	Increase	Service revenue
5	Received cash from customers on account, $8,200	Assets	Increase	Cash
Assets	Decrease	Accounts receivable