Analyze business transactions and the effect on thefinancial statements. The following business transactions occurred during Gator's Antiques Inc.'s first month of business.
1. Philip Gator began his antique business by depositing $15,000 into the business checking account. He received common stock in exchange.
2. Gator's Antiques provided services to customers for $25,000.
3. The company paid travel expenses in the amount of $700.
4. Gator's Antiques borrowed $1,000 from the bank for operating capital.
5. The company purchased $150 worth of office supplies (for future use) from Office Market for cash.
6. During the month, Gator's paid $3,500 for operating expenses.
7. The company paid monthly rent on the retail space in the amount of $500.
8. The company paid the staff $1,200.
9. The company paid a dividend of $100 to the owner, Philip Gator.
10. On the last day of the month, Gator's purchased equipment costing $7,500 by signing a note payable with the bank.
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 shareholder's equity (OE), or the statement of cash flows (CF). (Some will be shown on more than one statement.)