Hanlon Advertising Company began the current month with the following balance sheet.

Cash ...................... $ 80,000 Liabilities.................... $ 70,000

Noncash assets ............. 135,000 Contributed capital............ 110,000

Earned capital ............... 35,000

Total assets................. $215,000 Total liabilities and equity ....... $215,000

Following are summary transactions that occurred during the current month.

1. The company purchased supplies for $5,000 cash; none were used this month.

2. Services of $2,500 were performed this month on credit.

3. Services were performed for $10,000 cash this month.

4. The company purchased advertising for $8,000 cash; the ads will run next month.

5. The company received $1,200 cash as partial payment on accounts receivable from transaction 2.

6. The company paid $3,400 cash toward the accounts payable balance reported at the beginning of the month.

7. The company paid $3,500 cash toward this months wages expenses.

8. The company declared and paid dividends of $500 cash.

Required

a. Record the effects of each transaction using the financial statement effects template.

b. Prepare the income statement for this month and the balance sheet as of month-end