Janna Reed opened Reed Company, a veterinary business in Neosho, Wisconsin, on August 1, 2007. On August 31 the balance sheet showed: Cash $9,000; Accounts Receivable $1,700; Supplies $600; Office Equipment $5,000; Accounts Payable $3,600;

Common Stock $12,000; and Retained Earnings $700. During September the following transactions occurred. 1. Paid $3,400 cash for accounts payable due. 2. Received $1,600 from customers in payment of accounts receivable. 3. Purchased additional office equipment for $4,100, paying $1,000 in cash and the balance on account.

Problems: Set B 147 ss Earned revenue of $8,500, of which $2,300 is paid in cash and the balance is due in October.

Declared and paid a $600 cash dividend.

Paid salaries $900, rent for September $800, and advertising expense $250.

Incurred utility expenses for the month on account $170.

AG eReeclei ved $7,000 from Hilldale Bank; the money was borrowed on a 6-month note payable.

Instructions

(a) Prepare a tabular analysis of the September transactions beginning with August 31 —

(a) Cash $12,950 balances. The column headings should be: Cash + Accounts Receivable + Ret. earnings $ 6,480 Supplies + Office Equipment = Notes Payable + Accounts Payable + Common Stock + Retained Earnings. Include margin explanations for any changes in Retained Earnings.

(b) Prepare an income statement for September, a retained earnings statement for September, and a classified balance sheet at September 30, 2007.