Transaction Analysis Grace Stewart began the Stewart Answering Service in December. The firm provides services for professional people and is currently operating with leased equipment. On January 1, the assets and liabilities of the business were: Cash $6,400 Accounts Receivable 6,900 Accounts Payable 1,600 Notes Payable 1,500 Common Stock 10,200 Retained Earnings 0 The following transactions occurred during the month ofJanuary: Paid rent on office and equipment forJanuary, $1,800 Collected $6,000 on account from clients. Borrowed $3,000 from a bank and signed a note payable for that amount. Billed clients for work performed on account, $12,500. Paid $1,400 on accounts payable. Received invoice forJanuary advertising, $800. Paid Januaiy salaries, $3,200. Paid January utilities, $430 Paid stockholders a dividend of $3,600 cash. Purchased a printer (onJanuary 31)for business use, $1,400. AONDOONO'U'I-hWNA _\\ Paid $30 to bank as January interest on the outstanding note payable. Required (a) Set up an accounting equation in columnar form with the following individual assets, liabilities, and stockholders' equity accounts: Cash, Accounts Receivable, Equipment, Accounts Payable, Notes Payable, Common Stock, and Retained Earnings. Enter theJanuary1 balances below each item. (Note: The beginning Equipment account balance is $0.) (b) Show the impact (increase or decrease) of theJanuary transactions on the beginning balances, and total all columns to show that assets equal liabilities plus stockholders' equity as ofJanuary 31. Note: Use a negative sign with your answers, when needed. Cash + Accounts Receivable + Equipment = Accounts Payable + Notes Payable + Common Stock + Retained Earnings Balance 6,400 ~/ 6,900 v 0 v 1,600 ~/ 1,500 ~/ 10,200 0 o/ 1 1,800 at 0V 0v 0v 0v 0v 1,800x 2 6,000 v 6,000 x 0 ./ 0 v 0 v 0 ./ 0 ./ 3 3,000 ~/ 0 v 0 v 0 ~/ 3,000 ~/ 0 ~/ 0 v 4 av 12,500v 0v 0v 0v 0v 12,500v 5 1,400 x 0v ov 1,400): 0v 0v ov 6 av 0v 0" 800! 0v 0! 800): 7 3,200 x 0 v 0 v 0 v 0 v 0 v 3,200 x 8 430a: 0v 0v 0v 0v 0v 430x 9 3,600 x 0 v 0 v 0 ~/ 0 ~/ 0 v 3,600 x 10 1,400 at 0V 1,400v 0v 0v 0v 0v 11 30 x 0 v 0 o/ 0 o/ 0 o/ 0 ./ 30 x 3,540 ~/ 13,400 vi 1,400 v 1,000 wl 4,500 ~/ 10,200 vii 2,640 v 35 18,340 v 18,340 v