On August 1, 2006, Shad Menard established Centillion Realty. Shad completed the following transactions during the month of August:

a. Opened a business bank account with a deposit of $15,000 from personal funds.

b. Paid rent on office and equipment for the month, $2,400.

c. Paid automobile expenses (including rental charge) for month, $750, and miscellaneous expenses, $380.

d. Purchased supplies (pens, file folders, and copy paper) on account, $950.

e. Earned sales commissions, receiving cash, $17,350.

f. Paid creditor on account, $580.

g. Paid office salaries, $3,600.

h. Withdrew cash for personal use, $1,500.

i. Determined that the cost of supplies on hand was $275; therefore, the cost of supplies used was $675.

Instructions

1. Indicate the effect of each transaction and the balances after each transaction, using the following tabular headings:

Explain the nature of each increase and decrease in owner's equity by an appropriate notation at the right of the amount.
2. Prepare an income statement for August, a statement of owner's equity for August, and a balance sheet as of August31.

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Assets Liabilies Owner's Equity Cash Supplies Accounts Payable Shad Menard, Capital