Selected accounts of Armstrong Consulting, Inc., a financial services business, have the following balances at December 31, 2010, the end of its first year of operations. During the year, Lori Armstrong, the only stockholder, bought $20,000 of stock in the business.

Requirements 1. Identify each as an asset, liability, revenue, or expense.
2. Prepare the income statement of Armstrong Consulting, Inc., for the year ended December 31,2010. What is the result of operations for 2010?
3. Assuming the balance in Retained earnings on December 31,2010, was $18,400, what was the amount of the dividends during the year? Answer by preparing a statement of retained earnings to solve for the dividends. Recall that the business has just completed its first year and has no beginning balance for retained earnings.

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Office Furniture... $ 28,000 Rent Expense..... $36,000 Utilities Expense..... 12,600 Cash.............. 5,400 Accounts Payable............ 3,800 Office Supplies....... 800 Note Payable....... 21,500 Salary Expense... 43,000 Service Revenue 141,500 Salaries Payable...... 2,000 Accounts Receivable 9,500 Property Tax Expense 2,300 Supplies Expense....... 4,200 Equipment......... 22,000