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2 - 5 7 . Analyzing Transactions Using the Financial Statement Effects Template and Preparing an Income Statement ( FSET ) On December 1 ,

2-57. Analyzing Transactions Using the Financial Statement Effects Template and Preparing an
Income Statement (FSET)
On December 1, R. Lambert formed Lambert Services, which provides career and vocational counsel-
ing services to graduating college students. The following transactions took place during December,
and company accounts include the following: Cash, Accounts Receivable, Land, Accounts Payable,
Notes Payable, Common Stock, Retained Earnings, Counseling Services Revenue, Supplies Expense,
Advertising Expense, Interest Expense, Salary Expense, and Utilities Expense.
Raised $21,000 cash through common stock issuance.
Paid $2,250 cash for supplies and training materials.
Received $1,500 invoice for December advertising expenses.
Borrowed $45,000 cash from bank and signed note payable for that amount.
Received $3,600 cash for counseling services rendered.
Billed clients $20,400 for counseling services rendered.
Paid $6,600 cash for secretary salary.
Paid $1,110 cash for December utilities.
Declared and paid a $2,700 cash dividend.
Purchased land for $39,000 cash to use for its own facilities.
Paid $300 cash to bank as December interest expense on note payable.
REQUIRED
a. Report the effects for each of the separate transactions 1 through 11 using the financial state-
ment effects template. Total all columns and prove that (1) assets equal liabilities plus equity
on December 31, and (2) revenues less expenses equal net income for December.
b. Prepare an income statement for the month of December.
Help me complete a. and b.
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