Analyze business transactions and the effect on the financial statements. The following business transactions occurred during Dolphin's Dinghies Inc.'s first month of business. (LO 2, 4)

1. Douglas Dolphin began his dinghy business by depositing \(\$ 40,000\) into the business checking account in exchange for common stock.

2. The company paid travel expenses in the amount of \(\$ 250\).

3. Dolphin's Dinghies borrowed \(\$ 5,000\) from the bank for operating capital.

4. The company purchased \(\$ 350\) worth of office supplies (for future use) from Office Supermarket for cash.

5. During the month, Dolphin's repaired customers' dinghies for \(\$ 8,900\) cash.

6. The company paid the monthly rent on the retail space in the amount of \(\$ 1,200\).

7. The company paid the staff \(\$ 3,000\).
8. Other operating expenses for the month were \(\$ 1,500\), which were paid in cash.
9. On the last day of the month, the company purchased equipment costing \(\$ 17,000\) by signing a note payable with the bank.
10. The company paid a dividend of \(\$ 175\) to the owner, Douglas Dolphin.
\section*{Required}
For each transaction (items 1-10), do the following:

a. Identify whether it is an operating, investing, or financing transaction.

b. Determine whether there is an increase, decrease, or no effect on the total assets of the business.

c. Determine whether there is an increase, decrease, or no effect on net income.

d. Indicate on which financial statement each amount would appear: the income statement (IS), the balance sheet (BS), the statement of changes in stockholder's equity (SE), or the statement of cash flows (CF). (Some will be shown on more than one statement.)