Queens Delivery Service is owned and operated by Lisa Dewar

Queens Delivery Service is owned and operated by Lisa Dewar. The following selected transactions were completed by Queens Delivery Service during June: 1. Received cash in exchange for capital stock, $18,000. 2. Paid creditors on account, $1,800. 3. Billed customers for delivery services on account, $12,500. 4. Received cash from customers on account, $6,900. 5. Paid cash dividends, $4,000. Indicate the effect of each transaction on the accounting equation elements (Assets, Liabilities, Stockholders’ Equity, 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.

Solution

Date Asset = Liabilities + Stockholders equity common stock Retained earning Cash + Accounts receivable Accounts payable Capital stock Service revenue June 1 +18000 +18000 June 2 -1800 -1800 June 3 +12500 +12500 JUne 4 +6900 -6900 june5 -4000 4000 Total 19100 5600 -1800 18000 12500 -4000