P3-3A Cindy Braun created a corporation providing legal services, Cindy Braun Inc., on

July 1, 2014. On July 31 the balance sheet showed Cash $4,000; Accounts Receivable $2,500;

Supplies $500; Equipment $5,000; Accounts Payable $4,200; Common Stock $6,200; and

Retained Earnings $1,600. During August, the following transactions occurred.

Aug. 1 Collected $1,100 of accounts receivable due from customers.

4 Paid $2,700 cash for accounts payable due.

9 Performed services worth $5,400, of which $3,600 is collected in cash and

the balance is due in September.

15 Purchased additional office equipment for $4,000, paying $700 in cash and

the balance on account.

19 Paid salaries $1,400, rent for August $700, and advertising expenses $350.

23 Paid a cash dividend of $700.

26 Borrowed $5,000 from Standard Federal Bank; the money was borrowed on

a 4-month note payable.

31 Incurred utility expenses for the month on account $380.

Instructions

(a) Prepare a tabular analysis of the August transactions beginning with July 31 balances.

The column heading should be Cash + Accounts Receivable +Supplies + Equipment

= Notes Payable + Accounts Payable + Common Stock + Retained Earnings +

Revenues - Expenses - Dividends. Include margin explanations for any changes in

Retained Earnings.

(b) Prepare an income statement for August, a retained earnings statement for August,

and a classified balance sheet at August 31.