On April 1, Holly Dahl established Holiday Travel Agency. The following transactions were completed during the month.

1. Stockholders invested $10,000 cash in the business in exchange for common stock.

2. Paid $400 cash for April office rent.

3. Purchased office equipment for $2,500 cash.

4. Incurred $300 of advertising costs in the Chicago Tribune, on account.

5. Paid $600 cash for office supplies.

6. Earned $8,500 for services provided: $2,000 cash is received from customers, and the balance of $6,500 is billed to customers on account.

7. Declared and paid a $200 cash dividend.

8. Paid Chicago Tribune amount due in transaction (4).

9. Paid employees' salaries $2,200.

10. Received $5,700 in cash from customers billed previously in transaction (6).

Instructions

(a) Prepare a tabular analysis of the transactions using the following column headings: Cash, Accounts Receivable, Supplies, Equipment, Accounts Payable, Common Stock, and Retained Earnings (with separate columns for Revenues, Expenses, and Dividends).

Include margin explanation for any changes in Retained Earnings.

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