Arrow Copying Service began operations and engaged in these transactions during August 20xx:

LO 5 Effect of Transactions on the LO 6 Accounting Equation and Preparation of Financial Statements

a. Myra Lomax deposited 10,000 in cash in the name of the corporation, in exchange for 1,000 shares of the corporation.

b. Paid current month's rent, 900 .

c. Purchased copier for cash, 5,000 .

d. Copying job payments received in cash, 1,780.

e. Copying job billed to major customer, 1,360 .

f. Paid cash for paper and other copier supplies, 380 .

g. Paid wages to part-time employees, 560 h. Purchased additional copier supplies on credit, 280 .

i. Received partial payment from customer in transaction

e, 600 .

j. Paid current month's electricity bill, 180.

k. Made partial payment on supplies purchased in transaction \(\mathrm{h}, 140\).

1. Declared and paid dividends of 1,400 .

REQUIRED 1. Arrange the asset, liability, and shareholders' equity accounts in an equation similar to Exhibit 1-1, using these account titles: Cash, Accounts Receivable, Supplies, Copier, Accounts Payable, Share Capital, and Retained Earnings.

2. Show by addition and subtraction, as in Exhibit 1-1, the effects of the transactions on the accounting equation. Show new balances after each transaction, and identify each shareholders' equity transaction by type.

3. Using Exhibit 1-2 as a guide, prepare an income statement and a balance sheet for Arrow Copying Service.