Question

Bindy Crawford created a corporation providing legal services, Sage Hill Inc., on July 1, 2022. On July 31 the balance sheet showed: Cash $5,500; Accounts Receivable $4,050; Supplies $860; Equipment $6,550; Accounts Payable $5,750; Common Stock $9,250; and Retained Earnings $1,960. During August the following transactions occurred.

Aug. 1		Collected $1,140 of accounts receivable due from customers.
4		Paid $2,620 cash for accounts payable due.
9		Performed services worth $5,560, of which $3,590 is collected in cash and the balance is due in September.
15		Purchased additional office equipment for $4,070, paying $410 in cash and the balance on account.
19		Paid salaries $1,300, rent for August $720, and advertising expenses $330.
23		Paid a cash dividend of $680.
26		Borrowed $5,600 from American Federal Bank; the money was borrowed on a 4-month note payable.
31		Incurred utility expenses for the month on account $420.

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.)

Prepare an income statement for August.

Prepare a retained earnings statement for August. (List items that increase retained earnings first.)

Prepare a classified balance sheet at August 31. (List current assets in order of liquidity)

Answer 1

tabular analysis