Analyzing Transactions Using the Financial Statement Effects Template and Preparing Financial Statements Schrand Aerobics, |nc., rents studio space (including a sound system) and specializes in offering aerobics classes, OnJanuary 1, 2013, its beginning account balances are as follows: Cash, $5,000; Accounts Receivable, $5,200; Equipment, $0; Notes Payable, $2,500; Accounts Payable, $1,000; Common Stock, $5,500; Retained Earnings, $1,200; Services Revenue, $0; Rent Expense, $0; Advertising Expense, $0; Wages Expense, $0; Utilities Expense, $0; Interest Expense, $0. The following transactions occurred duringJanuary. Required (1) Paid $600 cash toward accounts payable (2) Paid $3,600 cash forJanuary rent (3) Billed clients $11,500 forJanuary classes (4) Received $500 invoice from supplier for T-shirts given toJanuary class members as an advertising promotion (5) Collected $10,000 cash from clients previously billed for services rendered (6) Paid $2,400 cash for employee wages (7) Received $680 invoice forJanuary utilities expense (8) Paid $20 cash to bank asJanuary interest on notes payable (9) Declared and paid $900 cash dividend to stockholders (10) Paid $4,000 cash onJanuary 31 to purchase sound equipment to replace the rental system (a) Using the nancial statements effects template, enterJanuary 1 beginning amounts in the appropriate columns of the rst row. (Hint: Beginning balances for columns can include amounts from more than one account.) (b) Report the effects for each of the separate transactions 1 through 10 in the financial statement effects template set up in part (a). Total all columns and prove that (1) assets equal liabilities plus equity atJanuary 31, and (2) revenues less expenses equal net income forJanuary. Balance Sheet Income Statement Transaction Cash Asset + Noncash Assets = Liabilities + Contributed Capital + Earned Capital Revenue - Expenses = Net Income BeginningBalances $ + $ = $ + $ + $ $ $ = $ (1) + + + (2) + + (3) + = (4) + (5) + = + (6) + = + + (7) + + + (8) + = + (9) + = + (10) + + + TOTALS + + + =(c) Prepare its income statement forJanuary 2013. Schrand Aerobics, Inc. Income Statement Expenses 0 3 Advertising Expense Wages Expense Utilities Expense Interest Expense Total Expenses Net Income $ (d) Prepare its statement of stockholders' equity for January 2013. (Enter dividends as a negative number.) Schrand Aerobics, Inc. Statement of Stockholders' Equity Common Stock Retained Earnings Total Stockholders' Equity Balance at January 1, 2013 $ $ Stock Issuance Dividends Net Income Balance at January 31, 2013 $ to(e) Prepare its balance sheet atJanuary 31, 2013. Sch rand Aerobics, Inc. Balance Sheet Assets Lia bilites $ $ Note payable Total liabilities 0 0 0 Stockholders' Equity 0 0 Total Assets $ Total Liabilities and Equity $