Ivan Izo created a corporation providing legal services, Ivan Izo, Inc., on July 1, 1998. On July 31 the balance sheet showed: Cash \(\$ 4,000\); Accounts Receivable \(\$ 1,500\); Supplies \(\$ 500\); Office Equipment \(\$ 5,000\); Accounts Payable \(\$ 4,200\); Common Stock \(\$ 6,500\) and Retained Earnings \(\$ 300\). 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 \(\$ 6,400\), 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 \(\$ 1,500\), rent for August \(\$ 900\), and advertising expenses \(\$ 350\).

6. Declared and paid a cash dividend of \(\$ 550\).

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

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

\section*{Instructions}

(a) Prepare a tabular analysis of the August transactions beginning with July 31 balances. The column heading should be: Cash + Accounts Receivable + Supplies + Office Equipment \(=\) Notes Payable + Accounts Payable + Common Stock + Retained Earnings.

(b) Prepare an income statement for August, a retained earnings statement for August, and a balance sheet at August 31