During 2022, its first year of operations as a delivery service, flint corporation entered into the following transactions. 1. issued shares of common stock to investors in exchange for $107,000 in cash. 2. borrowed $52,000 by issuing bonds. 3. purchased delivery trucks for $67,000 cash. 4. received $14,000 from customers for services performed. 5. purchased supplies for $5,700 on account. 6. paid rent of $4,400. 7. performed services on account for $10,500. 8. paid salaries of $28,800. 9. paid a dividend of $10,400 to shareholders. using the following tabular analysis, show the effect of each transaction on the accounting equation.

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.

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