Randy Coburn opened a law office, Randy Coburn, Attorney at Law, on July 1, 2017. On July 31, the balance sheet showed Cash $4,000, Accounts Receivable $1,500, Supplies $400, Equipment $5,000, Accounts Payable $4,200, Common Stock $6,000, and Retained Earnings $700. During August, the following transactions occurred. (Note: these balances are already in the working papers) Hints: When you see the word "paid", the account CASH will be decreased (AND at least one other account will also be affected - either increased or decreased). When you see the words "collected" or "received", the account CASH will be increased (AND at least one other account will also be affected - either increased or decreased). Note that EACH transaction below will affect AT LEAST TWO accounts. 1. Collected $1,400 of $1,500 accounts receivable due from clients. 2. Paid $2,700 cash for accounts payable due. 3. Recognized revenue of $7,900 of which $3,000 is collected in cash and the balance is due in September Purchased additional equipment for $1,000, paying $400 in cash and the balance on account. 5. Paid salaries $3,000, rent for August $900, and advertising expenses $250. 6. Declared and paid a $450 cash dividend. 7.- Received $2,000 from Standard Federal Bank; the money was borrowed on a 4-month note payable. 8. Incurred utilities expense for month on account $180. (a) Prepare a tabular analysis of the August transactions beginning with July 31 balances (see worl papers below). The column headings should be as follows: Cash + Accounts Receivable + Supplies + Equipment - Notes Payable + Accounts Payable + Common Stock + Retained Earnings + Revenues - Expenses - Dividends. Note: This step is partially completed for you in the working papers (below) YOL must fill in the amounts and complete the columns. Prepare: An income statement for August; (Do this using the working papers below) Aretained earnings statement for August, (Already completed for you) and a balance sheet at August 31. (Do this using the working papers below) Problem 1-2B ... working papers Instruction (a) ... (Partially completed for you) When completed - Use this data to complete instruction B (below) Assets Acct Recbl Splys Equip = Cash Accts Pyble 4,200 Liab. + Notes Pyble Stockholders Equity ------------- Ret. Exp Rev - Div Earn Common Stock 1,500 400 5,000 Bal 4,000 1 6,000 700 2 3 4 6 7 8 2,700 2,280 2,000 6,000 700 7900 5,000 400 6,000 14,100 4,330 450 14,100
