During 2022 , its first year of operations as a delivery service, Larkspur Corp. entered into the following transactions. 1. Issued shares of common stock to investors in exchange for \( \$ 126,000 \) in cash. 2. Borrowed \( \$ 56,700 \) by issuing a note. 3. Purchased delivery trucks for \( \$ 75,600 \) cash. 4. Performed services for customers for \( \$ 20,160 \) cash. 5. Purchased supplies for \( \$ 5,922 \) on account. 6. Paid rent of \( \$ 6,552 \). 7. Performed services on account for \( \$ 12,600 \). 8. Paid salaries of \( \$ 35,280 \). 9. Paid a dividend of \( \$ 13,860 \) to shareholders. Using the following tabular analysis, show the effect of each transaction on the accounting equation. Put explanations for changes to revenues or expenses in the right-hand margin. (If a transaction results in a decrease in Assets, Liabilities or Stockholders' Equity, placea negative sign (or parentheses) in front of the amount entered for the particular Asset, Liability or Equity item that was reduced.)

Certainly! Below is a tabular analysis of Larkspur Corp.'s transactions for 2022, showing their effects on the accounting equation (Assets = Liabilities + Stockholders' Equity). Explanations for changes to revenues or expenses are provided in the right-hand margin. | **Transaction** | **Assets** | **Liabilities** | **Stockholders' Equity** | **Explanation** | |-----------------|------------|------------------|---------------------------|------------------| | **1. Issued common stock for \$126,000 cash** | Cash **+ \$126,000** | | Common Stock **+ \$126,000** | Issuance of common stock increases equity | | **2. Borrowed \$56,700 by issuing a note** | Cash **+ \$56,700** | Notes Payable **+ \$56,700** | | Borrowing funds increases liabilities | | **3. Purchased delivery trucks for \$75,600 cash** | Delivery Trucks **+ \$75,600**
Cash **− \$75,600** | | | Exchange of cash for delivery trucks; no effect on equity | | **4. Performed services for customers for \$20,160 cash** | Cash **+ \$20,160** | | Revenues **+ \$20,160** | Revenue earned increases equity | | **5. Purchased supplies for \$5,922 on account** | Supplies **+ \$5,922** | Accounts Payable **+ \$5,922** | | Purchase on account increases assets and liabilities | | **6. Paid rent of \$6,552** | Cash **− \$6,552** | | Rent Expense **− \$6,552** | Rent expense decreases equity | | **7. Performed services on account for \$12,600** | Accounts Receivable **+ \$12,600** | | Revenues **+ \$12,600** | Revenue earned on account increases equity | | **8. Paid salaries of \$35,280** | Cash **− \$35,280** | | Salaries Expense **− \$35,280** | Salaries expense decreases equity | | **9. Paid a dividend of \$13,860 to shareholders** | Cash **− \$13,860** | | Dividends **− \$13,860** | Dividends reduce equity | --- ### **Summary of Effects** - **Assets** - Increased by cash from issuing stock and borrowing. - Decreased by purchasing trucks, paying rent, salaries, and dividends. - Increased by acquiring supplies and accounts receivable from services performed on account. - **Liabilities** - Increased by borrowing (Notes Payable) and purchasing supplies on account (Accounts Payable). - **Stockholders' Equity** - Increased by revenues from services performed. - Decreased by expenses (rent and salaries) and dividends paid to shareholders. - Increased by issuance of common stock. This analysis ensures that the accounting equation remains balanced after each transaction.