Bindy Crawford created a providing legal services, Bindy Crawford Inc., on July 1, 2022. On July 31 the showed Cash $4,000, $2,500, Supplies $500, Equipment $5,000, $4,200, $6,200, and Retained Earnings $1,600. During August, the following transactions occurred.
Aug. 1 Collected $1,100 of due from customers.
4 Paid $2,700 cash for due.
9 Performed services worth $5,400, of which $3,600 is collected in cash and the balance is due in September.
15 Purchased additional offi ce 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 of $700.
26 Borrowed $5,000 from American 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 + + Supplies + Equipment = Notes Payable + + + 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 classifi ed at August 31.
