Question: Bindy Crawford created a corporation providing legal services, Bindy Crawford Inc., on July 1, 2017. On July 31 the balance sheet showed Cash $4,000, Accounts Receivable $2,500, Supplies $500, Equipment $5,000, Accounts Payable $4,200, Common Stock $6,200, and Retained Earnings $1,600. During August, the following transactions occurred. Aug.
1 Collected $1,100 of accounts receivable due from customers.
4 Paid $2,700 cash for accounts payable due.
9 Performed services worth $5,400, of which $3,600 is collected in cash and the balance is due in September.
15 Purchased additional office equipment for $4,000, paying $700 in cash and the balance on account. 19 Paid salaries $1,400, rent for August $700, and advertising expenses $350.
23 Paid a cash dividend of $700.
26 Borrowed $5,000 from American Federal Bank; the money was borrowed on a 4-month note payable. 31 Incurred utility expenses for the month on account $380.
Instructions: (a) Prepare a tabular analysis of the August transactions beginning with July 31 balances. The column heading should be Cash + Accounts Receivable + Supplies + Equipment = Notes Payable + Accounts Payable + Common Stock + Retained Earnings + Revenues - Expenses - Dividends. Include margin explanations for any changes in Retained Earnings.
(b) Prepare an income statement for August, a retained earnings statement for August, and a classified balance sheet at August 31.