Question

Bindy Crawford created a corporation providing legal services, Splish Brothers Inc., on July 1, 2022. On July 31 the balance sheet showed: Cash $4,700; Accounts Receivable $6,150; Supplies $990; Equipment $8,650; Accounts Payable $7,850; Common Stock $10,550; and Retained Earnings $2,090. During August the following transactions occurred.

Aug. 1		Collected $1,150 of accounts receivable due from customers.
4		Paid $2,720 cash for accounts payable due.
9		Performed services worth $6,030, of which $3,570 is collected in cash and the balance is due in September.
15		Purchased additional office equipment for $4,140, paying $420 in cash and the balance on account.
19		Paid salaries $1,320, rent for August $600, and advertising expenses $450.
23		Paid a cash dividend of $680.
26		Borrowed $5,950 from American Federal Bank; the money was borrowed on a 4-month note payable.
31		Incurred utility expenses for the month on account $400.

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Answer 1

	Asset	=							Liabilities				Stockholders equity
	Cash	+	Accounts receivable	+	Supplies	+	Equipment	=	Notes payable	+	Accounts payable	+	common stock	+	Retained earning	+	Revenue	-	Expense	-	Dividend
Bal	4700		6150		990		8650		0		7850		10550		2090
1	1150		-1150
4	-2720										-2720
9	3570		2460														6030					services provided
15	-420						4140				3720
19	-1320																		1320			Expenses incurred
	-600																		600			Expenses incurred
	-450																		450			Expenses incurred
23	-680																				680	Dividend
26	5950								5950
31											400								400			expense
Total	9180	+	7460	+	990	+	12790	=	5950	+	9250	+	10550	+	2090	+	6030	-	2770	-	680

Error:

In income statement ,Revenue is equals to 6030 (from above template) and Advertising expense is 450 (as given) which makes total expense equals to 2770 and net income equals to 6030 --2770 = 3260

Retained earning at end = 2090 +3260 Net income = 5350 - 680 dividend = 4670

In Balance sheet by taking correct figures for each from above template total asset =total liabilities and stockholders equity = 30420