On May 1, Marty's Repair Shop Ltd. began operations. The following transactions were completed during the month:

1. Issued common shares for $8,000 cash.

2. Paid $1,280 for May office rent.

3. Purchased equipment for $16,000, paying $4,000 cash and signing a bank loan payable for the balance.

4. Purchased supplies on account, $700.

5. Received $4,200 from customers for repair services provided.

6. Paid for supplies purchased in transaction 4.

7. Paid May telephone bill of $200.

8. Provided repair services on account to customers, $3,600.

9. Paid employee salaries, $2,000.

10. Received $700 in advance for repair services to be provided next month.

11. Collected $1,600 from customers for services billed in transaction 8.

12. Declared and Paid $500 dividends to shareholders.

13. Paid $80 of interest on the bank loan obtained in transaction 3.

14. Paid income tax of $600.

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.