Helga Anderson started a new business and completed these transactions during December:

Dec. 1 Helga Anderson transferred $65,000 cash from a personal savings account to a checking account in the name of Anderson Electric in exchange for common stock.

2 Rented office space and paid $1,000 cash for the December rent.

3 Purchased $13,000 of electrical equipment by paying $4,800 cash and agreeing to pay the

$8,200 balance in 30 days.

5 Purchased office supplies by paying $800 cash.

6 Completed electrical work and immediately collected $1,200 cash for the work.

8 Purchased $2,530 of office equipment on credit.

15 Completed electrical work on credit in the amount of $5,000.

18 Purchased $350 of office supplies on credit.

20 Paid $2,530 cash for the office equipment purchased on December 8.

24 Billed a client $900 for electrical work completed; the balance is due in 30 days.

28 Received $5,000 cash for the work completed on December 15.

29 Paid the assistant’s salary of $1,400 cash for this month.

30 Paid $540 cash for this month’s utility bill.

31 Paid $950 cash for dividends.

Required 1 Arrange the following asset, liability, and equity titles in a table like Exhibit 1.9: Cash; Accounts Receivable; Office Supplies; Office Equipment; Electrical Equipment; Accounts Payable; Common Stock; Dividends; Revenues; and Expenses.

2 Use additions and subtractions to show the effects of each transaction on the accounts in the accounting equation. Show new balances after each transaction.

3 Use the increases and decreases in the columns of the table from part 2 to prepare an income statement, a statement of retained earnings, and a statement of cash flows for the month. Also prepare a balance sheet as of the end of the month.

Analysis Component 4 Assume that the owner investment transaction on December 1 was $49,000 cash instead of $65,000 and that Anderson Electric obtained the $16,000 difference by borrowing it from a bank. Explain the effect of this change on total assets, total liabilities, and total equity.