Cindy Belton opened a law office, Cindy Belton, Attorney at Law, on July 1, 2008. On July 31, the balance sheet showed Cash \($4,000,\) Accounts Receivable \($1,500,\) Supplies \($500,\) Office Equipment \($5,000,\) Accounts Payable \($4,200,\) and Cindy Belton, Capital \($6,800.\) During August the following transactions occurred.

1. Collected \($1,400\) of accounts receivable.

2. Paid \($2,700\) cash on accounts payable.

3. Earned revenue of \($9,000\) of which \($3,000\) is collected in cash and the balance is due in September.

4. Purchased additional office equipment for \($1,000,\) paying \($400\) in cash and the balance on account.

5. Paid salaries \($3,000,\) rent for August \($900,\) and advertising expenses \($350.\)

6. Withdrew \($750\) in cash for personal use.

7. Received \($2,000\) from Standard Federal Bank—money borrowed on a note payable.

8. Incurred utility expenses for month on account \($250.\)

Instructions

(a) Prepare a tabular analysis of the August transactions beginning with July 31 balances. The column headings should be as follows: Cash + Accounts Receivable + Supplies + Office Equipment = Notes Payable + Accounts Payable + Cindy Belton, Capital.

(b) Preparé an income statement for August, an owner’s equity statement for August, and a balance sheet at August 31.