Robin Klann created a corporation providing legal services, Robin Klann Inc., on July 1, 2012. On July 31 the balance sheet showed: Cash $4,000; Accounts Receivable $2,500; Supplies $500; Equipment $5,000; Accounts Payable $4,200; Common Stock $6,200; and Retained Earnings $1,600. During August the following transactions occurred.
Aug. 1 Collected $1,100 of accounts receivable due from customers.
4 Paid $2,700 cash for accounts payable due.
9 Earned revenue of $5,400, of which $3,600 is collected in cash and the balance is due in September.
15 Purchased additional office equipment for $4,000, paying $700 in cash and the balance on account.
19 Paid salaries $1,400, rent for August $700, and advertising expenses $350.
23 Paid a cash dividend of $700.
26 Received $5,000 from Standard Federal Bank; the money was borrowed on a 4-month note payable.
31 Incurred utility expenses for the month on account $380.
Instructions
(a) Prepare a tabular analysis of the August transactions beginning with July 31 balances. The column heading should be: Cash _ Accounts Receivable _ Supplies _ Equipment _ Notes Payable _ Accounts Payable _ Common Stock _ Retained
Earnings _ Revenues _ Expenses _ Dividends. Include margin explanations for any changes in Retained Earnings.
(b) Prepare an income statement for August, a retained earnings statement for August, and a classified balance sheet at August 31.