Reference no: EM133101205

Question - Bindy Crawford created a corporation providing legal services, Tamarisk, Inc., on July 1, 2022. On July 31 the balance sheet showed: Cash $5,900; Accounts Receivable $5,250; Supplies $710; Equipment $7,750; Accounts Payable $6,950; Common Stock $10,850; and Retained Earnings $1,810. During August the following transactions occurred.

Aug. 1 Collected $1,130 of accounts receivable due from customers.

Aug. 4 Paid $2,610 cash for accounts payable due.

Aug. 9 Performed services worth $5,690, of which $3,600 is collected in cash and the balance is due in September.

Aug. 15 Purchased additional office equipment for $4,510, paying $500 in cash and the balance on account.

Aug. 19 Paid salaries $1,500, rent for August $720, and advertising expenses $340.

Aug. 23 Paid a cash dividend of $700.

Aug. 26 Borrowed $5,750 from American Federal Bank; the money was borrowed on a 4-month note payable.

Aug. 31 Incurred utility expenses for the month on account $420.

Required -

1. Prepare a tabular analysis of the August transactions beginning with July 31 balances. Include margin explanations for any changes in Retained Earnings.

2. Prepare an income statement for August.