/9781337517386/cfi/92!/4/4@0.00:0.00 Chapter 2 Basic Accounting Systems: Cash Basis E2-10 Effects of transactions on accounting equation On Time Delivery Service had the following selected transactions during November 1. Received cash from issuance of common stock, $75,000. 2. Paid rent for November, $5,000. 3. Paid advertising expense, $3,000. 4. Received cash for providing delivery services, $34,500. 5. Borrowed $10,000 from Second National Bank to finance its operations. 6. Purchased a delivery van for cash, $25,000. 7. Paid interest on note from Second National Bank, $75. 8. Paid salaries and wages for November, $10,000. 9. Paid dividends, $2,000. Indicate the effect of each transaction on the accounting equation by listing the numbers identifying the transactions, (1) through O), in a vertical column, and inserting at the right of each number the appropriate letter from the following list: a. Increase in an asset, decrease in another asset. b. Increase in an asset, increase in a liability c. Increase in an asset, increase in stockholders' equity d. Decrease in an asset, decrease in a liability e. Decrease in an asset, decrease in stockholders' equity E2-11 Nature of transactions Cheryl Alder operates her own catering service. Summary financial data for March are presented in the following equation form. Each line, designated by a number, indicates the effect of a transaction on the balance sheet. Each increase and decrease in retained earn- ings, except transaction (4), affects net income. Cash 40,000 28,000 120,000) 18. Land LiabilitlesCommon Stock Retained Earnings 100,000 Bal 16,000 100,000 28,000 24,000 2. 3. 20.000