A tabular analysis of the transactions made during August 2014 by Colaw Company during its first month of operations is shown below. Each increase and decrease in stockholders’

equity is explained.

Assets 5 Liabilities 1 Stockholders’ Equity Accounts Common Retained Earnings Cash 1 A/R 1 Supp. 1 Equip. 5 Payable 1 Stock 1 Rev. 2 Exp. 2 Div. 1. 1$20,000 1$20,000 Com. Stock 2. 21,000 1$5,000 1$4,000 3. 2750 1$750 4. 14,100 1$5,400 1$9,500 Serv. Rev. 5. 21,500 21,500 6. 22,000 2$2,000 Div. 7. 2800 2$ 800 Rent Exp. 8. 1450 2450 9. 23,000 23,000 Salar. Exp. 10. 1300 2300 Util. Exp.

Instructions

(a) Describe each transaction.

(b) Determine how much stockholders’ equity increased for the month.

(c) Compute the net income for the month.

AppendixLO1