Answer:
Standard Accounting Equation is:
Assets = Liabilities + Stockholder's Equity
Stockholder's Equity has two components = Common Stock and retained earnings
1. Issued shares
This will increase common stock as for the value it is issued = $107,000
It will also increase cash as cash is received in exchange, for the same amount.
Net effect: Increase assets and increase stockholder's equity by $107,000
2. Issued bonds
This will increase bonds payable by the same amount, which is liability.
This will also increase cash as cash will be provided by issue of bonds.
Net effect: Increase in assets by $52,000, and increase in liabilities by the same.
3. Purchase trucks
This will increase fixed asset as trucks by the amount $67,000
As the amount is paid in cash, this will decrease cash by $67,000
Net effect: No effect on accounting equation as one asset increase with the decrease in another.
4. Received from customers
This will increase cash as cash is received by $14,000
This will decrease the accounts receivables as the customers standing outstanding have made the payment, both accounts are part of assets.
Net effect: No effect on accounting equation as one asset increase with the decrease in another.
5. Purchase of supplies
Supplies are a kind of inventory and this will increase supplies which is an asset, and on the other hand it is purchased on account that is on credit which will increase accounts payable.
Net effect: Increase in assets and increase in liabilities by $5,700 each.
6. Rent paid
This will decrease cash as cash is paid for the expense by $4,400.
Also it is an expense this will decrease revenue and accordingly retained earnings.
Net effect: Decrease in assets and decrease in stockholder's equity by $4,400 each.
7. Performed services
This will increase revenue and will increase retained earnings.
Further since services are provided on account it will increase the accounts receivables.
Net effect: Increase in assets and increase in stockholder's equity by $10,500
8. Paid salaries
This will decrease cash as cash is paid for the expense by $28,800.
Also it is an expense this will decrease revenue and accordingly retained earnings.
Net effect: Decrease in assets and decrease in stockholder's equity by $28,800 each.
9. Paid a dividend
This will decrease cash as cash is paid for the dividend by $10,400.
Also it is an allocation of revenue this will decrease revenue and accordingly retained earnings.
Net effect: Decrease in assets and decrease in stockholder's equity by $10,400 each.