Letty's Laundry and Dry Cleaning incorporated and started business on January 1, 2013.
1 Letty's Laundry and Dry Clearing began busine ss by depositing

\$ 30,000

in a checking account in the name of Letty's Laundry and Dry 1
Cleaning, Inc. for which capit al stock is issued.

2 Borrowed

\$ 6,000

from City Bank.
3 Purchased equipment from Washers Wholesale,

\$ 16,200

.
4 Purchased supplies costing

\$ 3,000

from Suds'n Stuff for cash
5 Paid one montlis rent for business space in Pine Plaza,

\$ 1,000

.
6 Servic esprovided to customers during J anuary totaled

\$ 13,400

. All serviceswere paid for in cash.
7 Paid employee sor January,

\$ 2,240

.
8 Received and paid the utility bill,

\$ 500

.
9 Received and paid the telephone bill,

\$ 250

.
10 Paid dividends to the stockholders,

\$ 2,140

. Indicate the effect of each transaction on the accounting equation by listing the numbers identifying the transactions, (1) through (10) in a vertical column, and inserting at the right of each number the appropriate letter from the following list:

\begin{array}{|l|l|}\hline \text { Increase in an asset, decrease in another asset. } & \text { a. } \\\hline \text { Increase in an asset, increase in a liability. } & \text { b. } \\\hline \text { Increase in an asset, increase in stockholders' equity. } & \text { c. } \\\hline \text { Decrease in an asset, decrease in a liability. } & \text { d. } \\\hline \text { Decrease in an asset, decrease in stockholders' equity } & \text { e. } \\\hline\end{array}

Exhibit 2-1 Refer to Exhibit 2-1

Multiple Choice

Correct Answer:VerifiedShow Answer

Correct Answer:
Verified