Reference no: EM131816034

Analyzing Transactions Using the Financial Statement Effects Template 

Hanlon Advertising Company began the current month with the following balance sheet. 

Cash	$ 80,000	Liabilities	$ 70,000
Noncash assets	135,000	Contributed capital	110,000
	Earned capital	35,000
Total assets	$215,000	Total liabilities and equity	$215,000

Following are summary transactions that occurred during the current month.

1. The company purchased supplies for $5,000 cash; none were used this month.
2. Services of $2,500 were performed this month on credit.
3. Services were performed for $10,000 cash this month.
4. The company purchased advertising for $8,000 cash; the ads will run next month.
5. The company received $1,200 cash as partial payment on accounts receivable from transaction 2.
6. The company paid $3,400 cash toward the accounts payable balance reported at the beginning of the month.
7. Paid $3,500 cash toward this month's wages expenses.
8. The company declared and paid dividends of $500 cash. 

(a) Record the effects of each transaction using the financial statement effects template.

(b) Prepare the income statement for this month and the balance sheet as of month-end.