Gary Meyer began a new law practice and completed these transactions during May 1990:

May 1 Transferred \(\$ 6,000\) from his personal savings account to a checking account opened in the name of the law practice, Gary Meyer, Attorney.

1 Rented the furnished office of a lawyer who was retiring, and paid cash for May's rent, \(\$ 1,000\).

1 Purchased the law library of the retiring lawyer for \(\$ 4,000\), paying \(\$ 2,000\) in cash and agreeing to pay the balance in six months.

2 Purchased office supplies for cash, \(\$ 200\).

7 Completed legal work for a client and immediately collected \(\$ 680\) in cash for the work done.

10 Purchased office equipment on credit, \(\$ 400\).

13 Completed legal work for City National Bank on credit, \(\$ 1,875\).

17 Purchased office supplies on credit, \(\$ 35\).

20 Paid for the office equipment purchased on May 10.

23 Completed legal work for Nash Realty on credit, \(\$ 1,200\).

25 Received \(\$ 1,875\) from City National Bank for the work completed on May 13 .

31 Paid the office secretary's salary, \(\$ 1,300\).

31 Paid the monthly utility bills, \(\$ 125\).

31 Gary Meyer took \(\$ 1,500\) out of the business for his personal use.

\section*{Required}

1. Arrange the following asset, liability, and owner's equity titles in an equation like Illustration 1-8: Cash; Accounts Receivable; Office Supplies; Law Library; Office Equipment; Accounts Payable; and Gary Meyer, Capital. Leave space for an Explanation column to the right of Gary Meyer, Capital.

2. Show by additions and subtractions the effects of each transaction on the items of the equation. Show new totals after each transaction. Next to each change in Gary Meyer, Capital, state whether the change was caused by an investment, a revenue, an expense, or a withdrawal.

3. Analyze the increases and decreases in the last column of the equation and prepare a May income statement for the practice.

4. Prepare a May statement of changes in owner's equity.

5. Prepare a May 31 balance sheet.