Candro corp. began operations on May 1,2010 and completed the following transactions during its first month of operations:
Sold capital stock for $30,000
Purchased land and a building valued at $35,000 and $165,000, respectively, by paying $10,000 cash and signing a 20 year mortgage for the balance.
Purchased office equipment on account , $7,500
Billed a customer for services performed , $5,000
Received an $800 deposit from a customer for services to be performed next month
Made a partial payment on account for the office equipment purchased in transaction (C),$1,500
Performed a service and immediately collected $2,000
Received and immediately paid the telephone bill for the month, $380.
Paid a dividend to owners, $3,000
Received but did not pay, the monthly utility bill, $450
Question:
A)Determine the effect of each of the preceding events on the accounting equation
B)Prepare the general journal entries to record each of these events. You may set up T accounts to keep track of some accounts. Do not prepare adjusting entries!
C)Prepare the income statement for the period
D)Prepare the statement of retained earnings for the period