Question

Bindy Crawford created a corporation providing legal services, Metlock, Inc., on July 1, 2022. On July 31 the balance sheet showed: Cash $4,300; Accounts Receivable $5,300; Supplies $960; Equipment $7,800; Accounts Payable $7,000; Common Stock $9,300; and Retained Earnings $2,060. During August the following transactions occurred. Aug. 1 Collected $1,100 of accounts receivable due from customers, Paid $2,720 cash for accounts payable due. Performed services worth $5,790, of which $3,540 is collected in cash and the balance is due in September 15 Purchased additional office equipment for $4.470, paying $420 in cash and the balance on account. 19 Paid salaries $1.480, rent for August $650 and advertising expenses $370. 23 Paid a cash dividend of $760, 26 Borrowed $5.700 from American Federal Bank; the money was borrowed on a 4-month note payable. Incurred utility expenses for the month on account $450. 4 9 31 (a) 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, Liability or Equity item that was reduced. See Illustration 3-4 for example. Post entries in the order presented in the question.)

Answer 1

The answer has been presented in the supporting sheet. For detailed answer refer to the supporting sheet.

Answer 1 2 2 3 3 + Cash + Liabilities Notes Accounts + Payable Payable + 7000 Stockholders Equity Revenue - Expenses - s + Supplies + Equipment + Assets Account Receivabe 5300 -1100 + + Dividends Common Stock 9300 Retained Earnings 2060 + + 960 + 7800 + + + + + + = + + + + 4300 1100 -2720 3540 + + + = + -2720 + + + 4 5 July 31 Bal. 6 Aug-01 7 4 8 8 9 9 15 10 19 11 12 + 2250 + + = + + + 5790 + 5790 Service Revenues -420 + + + 4470 = = + 4050 + + + - 1480 + + + = + + + + - 1480 + 1480 -650 + + + + = + + + -650 + 650 Salaries Expense Rent Expense Advertising Expense Dividends -370 + + + + + + -370 + 370 3 23 + + + = + + + -760 + 760 -760 5700 26 + + + + = 5700 + + + + 14 15 31 + + + + = + 450 + + -450 + + 450 Utilities Expense 16