On April 1, Crossroads Travel Agency, Inc. was established. The following transactions LO13 were completed during the month.

1. Stockholders invested $20,000 cash, receiving common stock in exchange.

2. Paid $800 cash for April office rent.

3. Purchased office equipment for $2,500 cash.

4. Incurred $300 of advertising costs in the Chicago Tribune, on account.

5. Paid $750 cash for office supplies.

6. Earned $12,000 for services rendered: Cash of $3,000 is received from customers, and the balance of $9,000 is billed to customers on account.

7. Paid $500 cash dividend.

8. Paid Chicago Tribune amount due in transaction (4).

9. Paid employees’ salaries $1,500.

10. Cash of $7,000 is received from customers who have previously been billed in transaction (6).

Instructions

(a) Prepare a tabular analysis of the transactions using the following column headings: Cash, Accounts Receivable, Supplies, Office Equipment, Accounts Payable, Common Stock, and Retained Earnings.

(b) From an analysis of the Retained Earnings column, compute the net income or net loss for April.