Ai Fang Co. opened on July 1, 2020. On July 31, the statement of financial position showed Cash 5,000, Accounts Receivable 1,500, Supplies 500, Equipment 6,000, Accounts Payable 4,200, Share CapitalOrdinary 4,000, and Retained Earning of 4,800 (amounts in thousands). During August, the following transactions occurred.

Instructions

1. Write the effect, account title and amount of each of the following transactions.
2. Prepare a tabular analysis of the August transactions beginning with July 31 balances.
3. Prepare an Income Statement for August.
4. Prepare a Retained Earnings Statement for August.
5. Prepare a Statement of Financial Position at August 31, 2020. (List Assets in reverse order of liquidity

1. Collected 1,200 of accounts receivable.
2. Paid 2,800 cash on accounts payable.
3. Recognized revenue of 7,500, of which 4,000 is collected in cash and the balance is due in September.
4. Purchased additional equipment for 2,000, paying 400 in cash and the balance on account.
5. Paid salaries 2,800, rent for August 900, and advertising expenses 400.
6. Declared and paid 700 dividend.
7. Received 2,000 from Standard Bankmoney borrowed on a note payable.
8. Incurred utility expenses for month on account 270.