Question

The following amounts summarize the financial position of Computer Works on May 31, 2014:


During June 2014, the business completed these transactions:
a. The business received cash of $9,800 and issued common stock.
b. Performed services for a customer and received cash of $5,800.
c. Paid $4,900 on accounts payable.
d. Purchased supplies on account, $700.
e. Collected cash from a customer on account, $600.
f. Consulted on the design of a computer system and billed the customer for services rendered, $3,400.
g. Recorded the following expenses for the month: (1) paid office rent—$1,500; (2) paid advertising—$2,000.
h. Declared and paid a cash dividend of $2,400.

Requirements
1. Analyze the effects of the preceding transactions on the accounting equation of Computer Works, Inc.
2. Prepare the income statement of Computer Works, Inc., for the month ended June 30, 2014. List expenses in decreasing order by amount.
3. Prepare the statement of retained earnings of Computer Works, Inc., for the month ended June 30, 2014.
4. Prepare the balance sheet of Computer Works, Inc., at June 30,2014.


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  • CreatedJuly 25, 2014
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