Transactions; financial statements OBJ. 4, 5 On July 1, 2016, Pat Glenn established Half Moon Realty. Pat completed the following transactions during the month of July:

a. Opened a business bank account with a deposit of $25,000 in exchange for common stock.

b. Purchased office supplies on account, $1,850.

c. Paid creditor on account, $1,200.

d. Earned sales commissions, receiving cash, $41,500.

e. Paid rent on office and equipment for the month, $3,600.

f. Paid dividends, $4,000.

g. Paid automobile expenses (including rental charge) for month, $3,050, and miscellaneous expenses, $1,600.

h. Paid office salaries, $5,000.

i. Determined that the cost of supplies on hand was $950; therefore, the cost of supplies used was $900.

Instructions 1. Indicate the effect of each transaction and the balances after each transaction, using the following tabular headings:

Assets 5 Liabilities 1 Stockholders’ Equity Cash + Supplies =

Accounts Payable +

Common Stock – Dividends +

Sales Commissions –

Salaries Expense –

Rent Expense –

Auto Expense –

Supplies Expense –

Misc.

Expense 2. Prepare an income statement for July, a retained earnings statement for July, and a balance sheet as of July 31.