Record the following transactions of Knights Drone Services, owned by Dee Knights, for the month of March 2021.

• March 1. Dee Knights invested $3,000 cash in exchange for common stock.
• March 15. Knights provided services and received cash amounting to $5,400 from customers.
• March 16. Purchased supplies on account, $100.
• March 17. Paid for gas and oil, $800.
• March 18. Paid salaries, 5,000.
• March 21. Provided service on credit, $600.
• March 28. Knights provided services and received cash amounting to $6,000.
• March 29. Paid for truck and equipment rental, $2,500.
• March 30. Knights Drone Services paid dividends of $2,000.

INSTRUCTIONS:

1. Record the above transactions in general journal form.
2. Prepare a trial balance after posting the entries to t-accounts (you can make your own t-accounts).
3. Prepare an income statement from trial balance.
4. Prepare a statement of retained earnings from the trial balance and income statement.
5. Prepare a balance sheet using the trial balance totals and the statement of retained earnings.
6. Explain why the companys cash balance does not agree with net income.