Question

Problem 3-OSA Bindy Crawford created a corporation providing legal services, Marin Inc., on July 1, 2022. On July 31 the balance sheet showed: Cash $5,300; Accounts Receivable $6,900; Supplies 5730; Lquipment $9,300; Accounts Payable $6.500; Common Stock $11,900; and Retained Earnings $1,830. During August the following transactions occurred. Aug. 1 Collected sl, 150 of accounts receivable due from customers 4 Pald $2.710 cash for accounts payable due. 9 Performed services worth $3,360, of which $3,580 is collected in cash and the balance is due in September. 15 Purchased additional office equipment for $4,490, paying $470 in cash and the balance on account. 19 Paid salaries $1,430, rent for August $650, and advertising expenses $320. 23 Paid a cash dividend of $650. 26 Barrowed $5,950 from American Federal Bank; the money was borrowed on a 4-month note payable. 31 incurred utility expenses for the month an account $440. Prepare a tabular analysis of the August transactions beginning with July 31 balances. Include margin explanations for any changes in Retained Earnings. (If a transaction causes a decrease in Assets, Liabilities or Stockholders' Equity, place a negative sign (or parentheses) in front of the amount entered for the particular Asset, Labrity or Equity Iten that was reduced. See Thrustration 3.4 for example. Post entries in the order presented in the question.) MARIN INC. Assets Liabilities Stockholders' Equity Cash + Accounts Receivable + Supplies + Equipment - Notes Payable Accounts Payable + Common Stock + Retained Earnings + Revenues - Expenses - Dividends July 31 Ralt Aug. 1 IIIIIIIII Prepare an income staternent for August. MARIN INC. Income Statement Prepare a retained earnings statement for August. (List items that increase retained earnings first.)

Answer 1

Income Stmt heads + + + + + + + + Service Revenue Marin Inc. Assets Liabilties Stockholders Equity Accounts Notes Accounts + Common + Retained No. Cash Receivable Supplies Equipment = Payable Payable + Stock + Earnings + Revenues - Expenses - Dividends 31-Jul 5,300 6,800 9,300 = 8,500 + 11,800 + 1,830 + 1-Aug 1,150 (1,150) 4-Aug (2,710) (2,710) + 9-Aug 3,580 1,780 5,360 15-Aug (470) 4,490 4,020 19-Aug (1,430) (1,430) - (650) (650) - (320) (320) - 23-Aug (650) (650) 26-Aug 5,950 5,950 31-Aug 440 (440) - Totals 9,750 7 ,430 730 13,790 = 5,950 10,250 + 11,800 + 1,830 + 5,360 - (2,840) - (650) + + + + + + + + + Salaries expense Rent expense Advertising expense + + + + + + + + + + + Utilities expense +

5,360 Marin Inc. Income Statement For the Month Ended August 31, 2022 Revenues Service Revenue Expenses Salaries expense Rent expense Advertising expense Utilities expense Total Expenses Net Income 1,430 650 320 440 2,840 2,520 Statement of Retained Earnings For the Month Ended August 31, 2022 Retained Earnings, August 1, 2022 Add: Net Income 1,830 2,520 4,350 (650) 3,700 Less: Dividends Retained Earnings, August 31, 2022

Marin Inc. Balance Sheet As of August 31, 2022 Assets Current Assets Cash Accounts Receivable Supplies Total Current Assets 9,750 7,430 730 17,910 Property, Plant & Equipment Equipment Total Assets 13,790 31,700 Liabilities & Stockholders Equity Current Liabilities Notes Payable Accounts Payable Total Current Liabilities 5,950 10,250 16,200 Stockholders Equity Common Stock Retained Earnings Total Stockholders Equity Total Liabilities & Stockholders Equity 11,800 3,700 15,500 31,700