An analysis of the transactions made by Cookie Mountain Legal, a law firm, for the month of July is shown below. Each increase and decrease in stockholders' equity is explained.

Instructions

(a) Prepare an income statement for the month ending July 31, 2022.

(b) Prepare a retained earnings statement for the month ending July 31, 2022.

Transcribed Image Text:

Assets Liab Stockholders' Equity Retained Earnings Rev. -Exp -Div. Cash Accounts Receivable + Supplies + Equipment = Accounts Payable + Com Stock + 1. +$15,000 +$15,000 2. 2,000 +$5,000 +$3,000 750 +$750 4. + 2,500 +$6,600 +$9,100 5. 6. 7. 1,500 2,500 750 - 1,500 8. + 550 -550 9. 4,500 10. + 500 Rev. -$2,500 Div. -$750 Rent -$4,500 Sal. -500 Util.