Truro Excavating Co., owned by Raul Truro, began operations in July and completed the fo...

Truro Excavating Co., owned by Raul Truro, began operations in July and completed the following transactions during that first month.

July 1 R. Truro invested $80,000 cash in the business.

2 Rented office space and paid $700 cash for the July rent.

3 Purchased excavating equipment for $5,000 by paying $1,000 cash and agreeing to pay the

$4,000 balance in 30 days.

6 Purchased office supplies for $600 cash.

8 Completed work for a customer and immediately collected $7,600 cash for the work.

10 Purchased $2,300 of office equipment on credit.

15 Completed work for a customer on credit in the amount of $8,200.

17 Purchased $3,100 of office supplies on credit.

23 Paid $2,300 cash for the office equipment purchased on July 10.

25 Billed a customer $5,000 for work completed.

28 Received $8,200 cash for the work completed on July 15.

30 Paid an assistant’s salary of $1,560 cash for this month.

31 Paid $295 cash for this month’s utility bill.

31 Truro withdrew $1,800 cash for personal use.

Required

1. Arrange the following asset, liability, and equity titles in a table like Exhibit 2.1: Cash; Accounts Receivable; Office Supplies; Office Equipment; Excavating Equipment; Accounts Payable; R. Truro, Capital; R. Truro, Withdrawals; Revenues; and Expenses.

2. Use additions and subtractions to show the effects of each transaction on the accounts in the accounting equation. Show new balances after each transaction.

3. Use the increases and decreases in the columns of the table from part 2 to prepare an income statement, and a statement of owner’s equity. Also prepare a balance sheet as of the end of the month.