Epps Company was started on January 1, 2005. During 2005, the company experienced the following three accounting events: (1) earned cash revenues of \($13,500\), (2) paid cash expenses of \($8,600\), and (3) paid a \($1,000\) cash dividend to stockholders. These were the only events that affected the company during 2005.

Required:

a. Write an accounting equation, and record the effects of each accounting event under the appropri¬ ate general ledger account headings.

b. Prepare an income statement for the 2005 accounting period and a balance sheet at the end of 2005 for Epps Company.