Merlin Forsyth established Avalon Services, P.C., a professional corporation, on August 1 of the current year. Avalon Services offers financial planning advice to its clients. The effect of each transaction on the balance sheet and the balances after each transaction for August are as follows. Each increase or decrease in stockholders' equity, except transaction (h), affects net income.

a. Describe each transaction.b. What is the amount of the net income forAugust?

Balance Sheet = Liabilities Stockholders Equity Assets Statement of ncome Accounts Accounts Capital Retained Cash Flows Statement + Receivable + Earnings Cash Supplies Payable Stock +20,000 +20,000 a. b. +1,500 +1,500 1,500 Bal. 20,000 1,500 20,000 -1,000 -1,000 C. 1,500 500 Bal. 19,000 20,000 +22,000 d. +22,000 d. 41,000 1,500 20,000 Bal. 500 22,000 -13,000 -13,000 e. e. Bal. 1,500 28,000 500 20,000 9,000 f. -1,100 f. -1,100 500 20,000 Bal. 28,000 400 7,900 +3,100 g +3,100 Bal. 28,000 3,100 400 500 20,000 11,000 -2,000 h. -2,000 3,100 9,000 Bal. 26,000 400 500 20,000 Statement of Cash Flows Income Statement d. Fees earned 22,000 a. Financing 20,000 -13,000 e. Expenses c. Operating -1,000 f. Expenses g. Fees earned -1,100 d. Operating e. Operating h. Financing 22,000 3,100 --13,000 -2,000 11,000 26,000