The analysis of Nelson€™s Painting Service€™s first seven transactions follows. The business only sold shares once and paid no dividends.

1. Label each of the transactions in the preceding analysis with the corresponding letter of the description that best fits it:
a. Earned revenue for painting services provided, but customer will pay later.
b. Customers paid cash for painting services completed earlier in the month.
c. Received cash for revenue earned by providing painting services.
d. Paid cash for expenses incurred to operate the business.
e. Paid cash to purchase painting equipment.
f. Sold shares to start the painting service business.
g. Borrowed money from the bank to purchase painting equipment.
2. If these transactions fully describe the operations of Nelson€™s Painting Service, Inc. during the month, what was the amount of its net income or net loss?

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Assets Liabilities + Shareholders' Equity Accounts Notes Common Retained Cash +Receivable Equipment Payable PayableSharesEarnings Accounts 1. $40,000 2. 1,200 3. 4. +$40,000 +1,200 + 25,000 = + $25,000 +$400 +400 - 750 +1,800 -750 6. 1800 7. 200 200