Mary Reaney is the proprietor of a career counseling and employee search business, Reaney Personnel Services. The following amounts summarize the financial position of the business on August 31, 2017:

During September 2017 the following company transactions occurred:
a. Reaney deposited $80,000 cash in the business bank account.
b. Performed services for a client and received cash of $5,000.
c. Paid off the August 31 balance of accounts payable.
d. Purchased supplies on account, $6,000.
e. Collected cash from a customer on account, $7,500.
f. Consulted on a large downsizing by a major corporation and billed the client for services rendered, $48,000.
g. Recorded the following business expenses for the month:
(1) Paid office rent for September 2017-$5,000.
(2) Paid advertising-$3,000.
h. Sold supplies to another business for $1,000 cash, which was the cost of the supplies.
i. Reaney withdrew $8,000 cash.
Required
1. Analyze the effects of the above transactions on the accounting equation of Reaney Personnel Services. Adapt the format of Exhibit 1-11, Panel B, on page 20.
2. Prepare the income statement of Reaney Personnel Services for the month ended September 30, 2017. List expenses in decreasing order of amount.
3. Prepare the business's statement of owner's equity for the month ended September 30, 2017.
4. Prepare the balance sheet of Reaney Personnel Services at September 30, 2017.

Transcribed Image Text:

Owner's Assets Liabilities+Equity Accounts Furniture and Accounts M. Reaney Cash +Receivable Supplies Computers PayableCapital Bal 40,000 35,000 95,000 55,000