Selected accounts of Armstrong Consulting, Inc., a financial services business, have the following balances at December 31, 2013, the end of its first year of operations. During the year, Lori Armstrong, the only shareholder, bought $20,000 of shares in the business.

Office Furniture $ 28,000

Utilities Expense 12,600

Accounts Payable 3,800

Note Payable 21,500

Service Revenue 141,500

Accounts Receivable9,500

Supplies Expense 4,200

Rent Expense $36,000

Cash 5,400

Office Supplies 800

Salary Expense 43,000

Salaries Payable 2,000

Property Tax Expense2,300

Equipment 22,000

Requirements

1. Identify each as an asset, liability, revenue, or expense.

2. Prepare the income statement of Armstrong Consulting, Inc. for the year ended December 31, 2013. What is the result of operations for 2013?

3. Assuming the balance in Retained Earnings on December 31, 2013, was $18,400, what was the amount of the Dividends during the year? Answer by preparing a statement of retained earnings to solve for the dividends. Recall that the business has just completed its first year and has no beginning balance for retained earnings.