Grace Main began the Main Answering Service in December 2015. The firm provides services for professional people and is currently operating with leased equipment. On January 1, 2016, the assets and liabilities of the business were:

Cash	$6,400
Accounts Receivable	6,900
Accounts Payable	1,600
Notes Payable	1,500
Common Stock	10,200
Retained Earnings	0

The following transactions occurred during the month of January:

Jan	1	Paid rent on office and equipment for January, $1,800.
	2	Collected $4,500 on account from clients.
	3	Borrowed $3,000 from a bank and signed a note payable for that amount.
	4	Billed clients for work performed on account, $12,500.
	5	Paid $1,400 on accounts payable.
	6	Received invoice for January advertising, $550.
	7	Paid January salaries, $3,800.
	8	Paid January utilities, $430.
	9	Paid stockholders a dividend of $3,600 cash.
	10	Purchased fax machine (on January 31) for business use, $1,400.
	11	Paid $30 to bank as January interest on the outstanding note payable.

Required

Set up an accounting equation in columnar form with the following individual assets, liabilities, and stockholders' equity accounts: Cash, Accounts Receivable, Equipment, Accounts Payable, Notes Payable, Common Stock, and Retained Earnings. Enter the January 1 balances below each item. Show the impact (increase or decrease) of the January transactions on the beginning balances, and total all columns to show that assets equal liabilities plus stockholders' equity as of January 31.

Answer rating: 100% (QA)

SNo Cash Accounts Equipment Accounts Payable Notes Payable Common ... View the full answer