Question - Nina Finzelberg started her own consulting firm, Finzelberg Consulting Inc., on May 1, 2014. The following transactions occurred during the month of May.
May 1 Stockholders invested $ 15,000 cash in the business in exchange for common stock.
May 2 Paid $ 600 for office rent for the month.
May 3 Purchased $ 500 of supplies on account.
May 5 Paid $ 150 to advertise in the County News.
May 9 Received $ 1,400 cash for services performed.
May 12 Paid $ 200 cash dividend.
May 15 Performed $ 4,200 of services on account.
May 17 Paid $ 2,500 for employee salaries.
May 20 Paid for the supplies purchased on account on May 3.
May 23 Received a cash payment of $ 1,200 for services performed on account on May 15.
May 26 Borrowed $ 5,000 from the bank on a note payable.
May 29 Purchased office equipment for $ 2,000 paying $ 200 in cash and the balance on account.
May 30 Paid $ 180 for utilities.
1. Show the effects of the above transactions on the accounting equation using the following format. Assume the note payable is to be repaid within the year.
2. Prepare an income statement for the month of May 2014.
3. Prepare a classified balance sheet at May 31, 2014. (List current assets in order of liquidity).