Question

Analyzing Transactions Using the Financial Statement Effects Template and Preparing Financial Statements
Schrand Aerobics, Inc., rents studio space (including a sound system) and specializes in offering aerobics classes. On January 1, 2013, its beginning account balances are as follows: Cash, $11,250; Accounts Receivable, $11,700; Equipment, $0; Notes Payable, $5,625; Accounts Payable, $2,250; Common Stock, $12,375; Retained Earnings, $2,700; Services Revenue, $0; Rent Expense, $0; Advertising Expense, $0; Wages Expense, $0; Utilities Expense, $0; Interest Expense, $0.
The following transactions occurred during January.

Required

(1) Paid $1,350 cash toward accounts payable
(2) Paid $8,100 cash for January rent
(3) Billed clients $25,875 for January classes
(4) Received $1,125 invoice from supplier for T-shirts given to January class members as an advertising promotion
(5) Collected $22,500 cash from clients previously billed for services rendered
(6) Paid $5,400 cash for employee wages
(7) Received $1,530 invoice for January utilities expense
(8) Paid $45 cash to bank as January interest on notes payable
(9) Declared and paid $2,025 cash dividend to stockholders
(10) Paid $9,000 cash on January 31 to purchase sound equipment to replace the rental system

Prepare Balance Sheet

Prepare its income statement for January 2013.

Prepare its statement of stockholders' equity for January 2013.

Prepare its balance sheet at January 31, 2013.

Answer 1