The following amounts summarize the financial position of Davis Resources on May 31, 2012:

During June, 2012, the business completed these transactions:
a. The business received cash of $8,900 and issued common stock.
b. Performed services for a customer and received cash of $6,300.
c. Paid $4,100 on accounts payable.
d. Purchased supplies on account, $700.
e. Collected cash from a customer on account, $200.
f. Consulted on the design of a computer system and billed the customer for services rendered, $2,400.
g. Recorded the following expenses for the month:
(1) Paid office rent—$1,300;
(2) Paid advertising—$1,000.
h. Declared and paid a cash dividend of $2,000.

Requirements
1. Analyze the effects of the preceding transactions on the accounting equation of Davis Resources, Inc.
2. Prepare the income statement of Davis Resources, Inc., for the month ended June 30, 2012. List expenses in decreasing order by amount.
3. Prepare the statement of retained earnings of Davis Resources, Inc., for the month ended June 30, 2012.
4. Prepare the balance sheet of Davis Resources, Inc., at June 30,2012.

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Assets Liabilities Stockholders' Equity Retained Cash ReceivableSupplies Land PayableStockEarnings 2,600 Accounts Accounts Common Bal 1,050 1,350 11,700 7,900 3,600