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Example
Exercises
3. Billed customers for delivery services on account, $22,400.
4. Received cash from customers on account, $11,300.
5. Paid dividends, $6,000.
Indicate the effect of each transaction on the accounting equation elements (Assets,
Liabilities, Stockholders’ Equity Capital Stock, 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) Asset (Cash) increases by $25,000; Stockholders’ Equity (Capital Stock) increases by
$25,000.
Prepare an income statement for the current year ended August 31, 2014.