Effects of revenue, expense, and dividend events
Ruff Company was started on January 1, 2009. During 2009, the company experienced the following three accounting events: (1) earned cash revenues of $13,500, (2) paid cash expenses of $9,200, and (3) paid a $500 cash dividend to its stockholders. These were the only events that affected the company during 2009.
Required
a. Write an accounting equation, and record the effects of each accounting event under the appropriate general ledger account headings.
b. Prepare an income statement for the 2009 accounting period and a balance sheet at the end of 2009 for Ruff Company.