Swender Excavating Co., owned by Patrick Swender, began operations in July and completed these transactions during that first month:

July 1 P. Swender invested \($60,000\) cash in the business as its initial capital.

2 Rented office space and paid \($500\) cash for the July rent.

3 Purchased excavating equipment for \($4,000\) by paying \($800\) cash and agreeing to pay the \($3,200\) balance in 30 days.

6 Purchased office supplies for \($500\) cash.

8 Completed work for a customer and immediately collected \($2,200\) cash for the work.

10 Purchased \($3,800\) of office equipment on credit.

15 Completed work for a customer on credit in the amount of \($2,400\).

17 Purchased $ 1,920 of office supplies on credit.

23 Paid \($3,800\) cash for the office equipment purchased on July 10.

25 Billed a customer \($5,000\) for work completed; the balance is due in 30 days.

28 Received \($2,400\) cash for the work completed on July 15.

30 Paid an assistant’s salary of \($1,260\) cash for this month.

31 Paid \($260\) cash for this month’s utility bill.

31 P. Swender withdrew \($1,200\) cash for personal use.

Required

1. Arrange the following asset, liability, and equity titles in a table like Exhibit 1.9: Cash; Accounts Receivable; Office Supplies; Office Equipment; Excavating Equipment; Accounts Payable; P. Swender, Capital; P. Swender, Withdrawals; Revenues; and Expenses.
2. Use additions and subtractions to show the effects of each transaction on the accounts in the ac¬ counting 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 owner’s equity, 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 Swender’s \($4,000\) purchase of excavating equipment on July 3 was financed from an additional personal investment of another \($4,000\) cash in the business (instead of the purchase conditions described in the transaction). Explain the effect of this change on total assets, total li¬ abilities, and equity.