The transactions relating to the formation of Blue Co. Stores Inc., and its first month of operations follow.

1. The firm was organized and the stockholders invested cash of $7,100.
2. The firm borrowed $4,100 from the bank; a short-term note was signed.
3. Display cases and other store equipment costing $1,700 were purchased for cash. The original list price of the equipment was $1,910, but a discount was received because the seller was having a sale.
4. A store location was rented, and $1,250 was paid for the first month's rent.
5. Inventory of $15,400 was purchased; $8,300 cash was paid to the suppliers, and the balance will be paid within 45 days.
6. During the first week of operations, merchandise that had cost $4,100 was sold for $5,800 cash.
7. A newspaper ad costing $120 was arranged for; it ran during the second week of the store's operations. The ad will be paid for in the next month.
8. Additional inventory costing $4,350 was purchased; cash of $1,200 was paid, and the balance is due in 30 days.
9. In the last three weeks of the first month, sales totaled $13,500, of which $10,000 was sold on account. The cost of the goods sold totaled $8,500.
10. Employee wages for the month totaled $1,800; these will be paid during the first week of the next month.
11. The firm collected a total of $3,350 from the sales on account recorded in transaction i.
12. The firm paid a total of $4,550 of the amount owed to suppliers from transaction e.

Required:

1. Record each transaction in the appropriate columns. Indicate the financial statement effect.
2. Calculate the total assets, liabilities, and stockholders' equity at the end of the month and calculate the amount of net income for the month.
3. After completing parts a through l, prepare an income statement for Blue Co. Stores Inc. for the month presented and a balance sheet at the end of the month.

1.

ASSETS LIABILITIES + STOCKHOLDERS' EQUITY Transaction Accounts Merchandise Notes Accounts Paid-in Retained Cash + Receivable + Inventory + Equipment Payable + Payable + Capital + Earnings + Revenue Expenses a. b. C. d. e. f. g. h. i. j. k. I. + + + + + Calculate the total assets, liabilities, and stockholders' equity at the end of the month and calculate the amount of net income for the month. Assets Liabilities Stockholders' Equity Net Income After completing parts a through I, prepare an income statement for Blue Co. Stores Inc. for the month presented. (Enter decreases with a minus sign to indicate a negative income statement effect.) BLUE CO. STORES INC. Income Statement Effect