Interstate Delivery Service is owned and operated by Katie Wyer. The following selected transactions were completed by Interstate Delivery during May:Indicate the effect of each transaction on the following accounting equation elements (Assets, Liabilities, Common Stock, Dividends, 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; Common Stock increases by $18,000. Element Item Direction1. Received cash in exchange for common stock, $18,000. Asset Cash Increases Common Stock Increases2. 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 and Explanation:

The indication and effect of each transaction are as follows

Particulars Element Item Direction

1. Received cash in exchange

for common stock, $18,000. Asset Cash Increases

Common Stock Increases

It increased both assets and the common stock

2. Paid advertising expense,

$4,850. Expense Advertising Expense Increases

Asset Cash Decreases

It increased the expenses and reduced the assets

3. Purchased supplies on account,

$2,100. Asset Supplies Increases

Liability Accounts Payable Increases

It increased the assets and also increased the liabilities

4. Billed customers for delivery

services on account, $14,700. Asset Accounts Receivable Increases

Revenue Delivery Service Fees Increases

It increased the assets and the revenue is also increased

5. Received cash from

customers on account, $8,200. Asset Cash Increases

Asset Accounts Receivable Decreases

It increased the assets in cash but it reduced the assets i. e account receivable