Marian Crone owns and operates a public relations firm called Dance Fever, Inc. The following amounts summarize her business on August 31, 2011:

During September 2011, the business completed the following transactions:

a. Issued common stock and received cash of $15,000.

b. Performed service for a client and received cash of $1,200.

c. Paid off the beginning balance of accounts payable.

d. Purchased supplies from OfficeMax on account, $500.

e. Collected cash from a customer on account, $600.

f. Received cash of \($2,000\) and issued common stock.

g. Consulted for a new band and billed the client for services rendered, $5,300.

h. Recorded the following business expenses for the month:
1. Paid office rent, $1,100.
2. Paid advertising, $500.

i. Returned supplies to OfficeMax for \($90\) cash, which was the cost of the supplies.

j. Paid cash dividends of $2,000.

Requirements

1. Analyze the effects of the preceding transactions on the accounting equation of Dance Fever.
2. Prepare the income statement of Dance Fever for the month ended September 30, 2011.
3. Prepare the entity’s statement of retained earnings for the month ended September 30, 2011.
4. Prepare the balance sheet at September 30, 2011.

Transcribed Image Text:

Assets Liabilities Accounts Date Cash + receivable + Supplies + Land = Accounts payable + Common Stockholders' equity Retained stock + earnings Bal 2,400 + 1,800 + 0 + 14,000 = 3,000 + 5,000 + 10,200