Hyman Inc. was started on May 1. Here is a summary of the May transactions.

1. Stockholders invested $30,000 cash in the company in exchange for common stock.

2. Purchased equipment for $10,000 cash.

3. Paid $700 cash for May office rent.

4. Paid $300 cash for supplies.

5. Purchased $750 of advertising in the Evening Times on account.

6. Received $8,000 in cash from customers for service.

7. Paid a $500 cash dividend.

8. Paid part-time employee salaries $1,000.

9. Paid utility bills $140.

10. Performed service on account to customers $2,000.

11. Collected cash of $1,000 for services billed in transaction (10).

Instructions

(a) Prepare a tabular analysis of the transactions using these column headings: Cash, Accounts Receivable, Supplies, Equipment, Accounts Payable, Common Stock, and Retained Earnings (with separate columns for Revenues, Expenses, and Dividends). Revenue is called Service Revenue. Include margin explanations for any changes in Retained Earnings.

(b) From an analysis of the Retained Earnings columns, compute the net income or net loss for May.