# Bindy Crawford created a corporation providing legal services, Bindy Crawford Inc., on July 1,2025 . On July

## Question:

Bindy Crawford created a corporation providing legal services, Bindy Crawford Inc., on July 1,2025 . On July 31 the balance sheet showed Cash $$\ 4,000$$, Accounts Receivable $$\ 2,500$$, Supplies $$\ 500$$, Equipment $$\ 5,000$$, Accounts Payable $$\ 4,200$$, Common Stock $$\ 6,200$$, and Retained Earnings $$\ 1,600$$. During August, the following transactions occurred.

Aug. 1 Collected $$\ 1,100$$ of accounts receivable due from customers.

4 Paid $$\ 2,700$$ cash for accounts payable due.

9 Performed services worth $$\ 5,400$$, of which $$\ 3,600$$ is collected in cash and the balance is due in September.

15 Purchased additional office equipment for $$\ 4,000$$, paying $$\ 700$$ in cash and the balance on account.

19 Paid salaries $$\ 1,400$$, rent for August $$\ 700$$, and advertising expenses $$\ 350$$.

23 Paid a cash dividend of $$\ 700$$.

26 Borrowed \$5,000 from American Federal Bank; the money was borrowed on a 4-month note payable.

31 Incurred utility expenses for the month on account $$\ 380$$.

Instructions

a. Prepare a tabular analysis of the August transactions beginning with July 31 balances. The column heading should be Cash + Accounts Receivable + Supplies + Equipment $$=$$ Notes Payable + Accounts Payable + Common Stock + Retained Earnings + Revenues - Expenses - Dividends. Include margin explanations for revenues and expenses.

b. Prepare an income statement for August, a retained earnings statement for August, and a classified balance sheet at August 31.

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