=+h3-5 Sherry Kerr established Espresso Services, P.C., a professional corporation, on January 1 of Accrual basis ofaccounting the current year. Espresso Services offers financial planning advice to its clients. The effect of Obj 2 each transaction on the balance sheet and the balances after each transaction for January are as follows. Each increase or decrease in stockholders’ equity, except transaction (h), affects net income.

Assets = Liabilities + Stockholders’ Equity a.

b.

Cash

+ 30,000 Accounts

+ Receivable + Supplies

+ 1,200 Accounts

= Payable

+ 1,200 Capital

+ Stock +

+ 30,000 Retained Earnings Bal. 30,000 1,200 1,200 30,000

c. -900 -900 Bal. 29,100 1,200 300 30,000

d. + 18,500 + 18,500 Bal. 47,600 1,200 300 30,000 18,500

e. -10,000 -10,000 Bal. 37,600 1,200 300 30,000 8,500

f- -800 -800 Bal. 37,600 400 300 30,000 7,700 g + 2,000 + 2,000 Bal. 37,600 2,000 400 300 30,000 9,700 h. -1,800 -1,800 Bal. 35,800 2,000 400 300 30,000 7,900

a. Describe each transaction.

b. What is the amount ofthe net income for January?