Gels and Shells, Inc., was established on January 1 and entered into the following transactions during its first month of business:
1. Issued common stock of $50,000 in exchange for cash.
2. Purchased equipment for $24,000 cash.
3. Purchased supplies of $6,000 on account.
4. Received $235 bill for January advertising in the newspaper.
5. Billed customers $14,680 for services.
6. Paid salaries of $2,015.
7. Received payment of $6,023 from customers for bills in #5.
8. Received $5,000 cash for services to be performed in March.
9. Paid $4,500 to suppliers for purchase in #3.
10. Received bill for January utilities in the amount of$175.
11. Paid dividends of $300 to stockholders.
12. Borrowed $10,000 from bank on a long-term basis.
13. Paid $100 interest on the bank loan.
Required
a. Show the effects of each transaction on the accounting equation by preparing a tabular analysis using the following column headings: Cash, Accounts Receivable, Supplies, Property and Equipment, Accounts Payable, Unearned Revenue, Notes Payable, Common Stock,
Retained Earnings.
b. Prepare an income statement for the month of January.
c. Prepare a statement of retained earnings for the month of January.
d. Prepare a balance sheet at January 31.