PSA2.2:

Aurora Goodwin started her own consulting firm, 1 May 2016. The following transactions occurred during the month of May: May 1 Shareholders invested $10000 cash in the business. 2 Paid $1050 for office rent for the month 3 Purchased $250 of supplies on account. 5 Paid $75 to advertise in the Auckland News 9 Received $1250 cash for services provided 12 Paid $100 for telephone. 15 Performed $3500 of services on account. 17 Paid $2000 for employee salaries. 20 Paid for the supplies purchased on account on 3 May. 23 Received a cash payment of $2250 for services provided on account on 15 May. 26 Borrowed $2500 from the bank. 29 Purchased office equipment for $1200 on account. 30 Paid $125 for electricity. Required (a) Show the effects of the previous transactions on the accounting equation using following format: Include margin explanations for any changes in Retained Earnings. (b) Prepare a statement of profit or loss for the month of May. (c) Prepare a statement of financial position as at 31 May 2016