On April 1, Adventures Travel Agency Inc Inc. began operations. The following transactions were completed during the month:

1. Issued common shares for $5,000 cash.

2. Obtained a bank loan for $20,000.

3. Paid $11,000 cash to buy equipment.

4. Paid $1,200 cash for April office rent.

5. Paid $1,450 for supplies.

6. Purchased $600 of newspaper advertising on account.

7. Earned $18,000 for services performed: cash of $2,000 was received from customers, and the balance was billed to customers on account.

8. Declared and paid $400 of dividends to shareholders.

9. Paid the utility bill for the month, $2,000.

10. Paid the amount due for newspaper advertising in transaction 6.

11. Paid $100 of interest on the bank loan obtained in transaction 2.

12. Paid employees' salaries, $6,400.

13. Received $12,000 cash from customers billed in transaction 7.

14. Paid income tax, $1,500.

Instructions

(a) Prepare an equation analysis of the effects of the above transactions on the expanded accounting equation, similar to that shown in Illustration 3.3.

(b) Calculate total assets, liabilities, and shareholders' equity at the end of the month and net income for the month.