Motorcross Delivery Service is owned and operated by Jim Smith. The following selected transactions were completed by Motorcross Delivery Service during February:

1. Received cash in exchange for capital stock. $30,000

2. Paid advertising expense, $1,200.

3. Purchased supplies on account $450.

4. Billed customers for delivery services on account. $7,500

S. Received cash from customers on account, $4,900.

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) Asses (Cash) increases by $30,000, Stockholders’ Equity (Capital Stuck) increases by answer to (1) is shown below.

(1) Asset (Cash) increases by $30,000; Stockholder’s Equity (Capital Stock increase by $30,000.