Lama started a new business, Alma company, and completed the following transactions during the month of July 2019.

1. Lama invested $21,000 cash in the Alma company

2. Received $3,500 cash from customers for services performed

3. Purchased office supplies for $400 on account

4. Performed services for customers for $2,000, and customers has not paid yet

5. Paid $325 cash for advertising

6. Collected cash from customers in transaction # 4

7. Paid $1,250 salaries for the employees

8. Paid $150 for the office supplies purchased in transaction # 3

9. Lama withdraw $500 cash for personal use

Required

1. Analyze the above transactions using the accounting equation

2. Prepare:

a. income statement for the month ending July 31, 2019.

b, statement of owners equity for the month ending July 31, 2019. Assume that beginning capital balance is $10,000

c. balance sheet as of July 31, 2019.

Solution 1)