Marie Blaesing started her own consulting firm, Blaesing Consulting Inc., on May 1, 2007. The following transactions occurred during the month of May.

Problems: Set A 141 Prepare a trial balance.

Identify normal account balance and corresponding financial statement.

(SO 3)

Analyze transactions and compute net income.

(SO 1)

(a) Cash Ret. earnings

$23,000

$ 6,300 Analyze transactions and prepare financial statements.

(SO 1)

142 CHAPTER 3 The Accounting Information System May 1 _ Stockholders invested $12,000 cash in the business in exchange for common stock.

2 Paid $700 for office rent for the month.

3 Purchased $500 of supplies on account.

5 Paid $150 to advertise in the County News.

9 Received $1,000 cash for services provided.

12 Paid $200 cash dividend.

15 Performed $3,200 of services on account.

17 Paid $2,500 for employee salaries.

20 Paid for the supplies purchased on account on May 3.

23 Received a cash payment of $1,500 for services provided on account on May 15.

26 Borrowed $5,000 from the bank on a note payable.

29 Purchased office equipment for $2,400 paying $200 in cash and the balance on account.

30 ~=Paid $150 for utilities.

Instructions

(a) Cash $15,100

(a) Show the effects of the previous transactions on the accounting equation using the Ret. earnings $ 500 following format. Assume the note payable is to be repaid within the year.

Stockholders’

Assets = Liabilities + Equity Accounts ; Office _ Notes Accounts Common Retained ee Receivable eS Equipment — Payable Payable Stock Earnings Include margin explanations for any changes in Retained Earnings.

(b) Net income $700

(b) Prepare an income statement for the month of May.

(c) Prepare a classified balance sheet at May 31, 2007.

Analyze