An income statement reports the changes in equity attributable to the operation of the business during a specific time period. Revenues increase equity, and expenses decrease equity. \begin{tabular}{|c|c|c|c|c|} \hline Wo. Transaction: & Net Income & Total Assets & \begin{tabular}{c} Total \\ Liabilities \end{tabular} & Total Equity \\ \hline Where can you go to find each of your answers? & \begin{tabular}{l} Income \\ statement \end{tabular} & Balance sheet & Balance sheet & Balance sheet \\ \hline \begin{tabular}{l} April 1 Tanner invested $80,000 cash along with office \\ equipment valued at $26,000 in the company \\ in exchange for common stock. \end{tabular} & $ & 106,000 & $ & 106,000 \\ \hline \begin{tabular}{l} April 2 The company prepaid $9,000 cash for 12 \\ months' rent for office space. The company's policy is \\ record prepaid expenses in balance sheet accounts. \end{tabular} & 0 & 106,000 & 0 & 106,000 \\ \hline \begin{tabular}{l} April 3 The company made credit purchases for \\ $8,000 in office equipment and $3,600 in office \\ supplies. Payment is due within 10 days. \end{tabular} & & & & \\ \hline \begin{tabular}{l} April 6 The company completed services for a client \\ and immediately received $4,000 cash. \end{tabular} & & & & \\ \hline \begin{tabular}{l} April 9 The company completed a $6,000 project for a \\ client, who must pay within 30 days. \end{tabular} & & & & \\ \hline \begin{tabular}{l} April 13 The company paid $11,600 cash to settle the \\ account payable created on April 3 . \end{tabular} & & & & \\ \hline \begin{tabular}{l} April 19 The company paid $2,400 cash for the \\ premium on a 12 -month prepaid insurance policy. The \\ company's policy is to record prepaid expenses in \\ balance sheet accounts. \end{tabular} & 7 & & & \\ \hline \begin{tabular}{l} April 22 The company received $4,400 cash as partial \\ payment for the work completed on April 9 . \end{tabular} & & & & \\ \hline \begin{tabular}{l} April 25 The company completed work for another \\ client for $2,890 on credit. \end{tabular} & & & & \\ \hline April 28 The company paid $5,500 cash in dividends. & & & & \\ \hline \begin{tabular}{l} April 29 The company purchased $600 of additional \\ office supplies on credit. \end{tabular} & & & & \\ \hline \begin{tabular}{l} April 30 The company paid $435 cash for this month's \\ utility bill. \end{tabular} & & & & \\ \hline \end{tabular} The trial balance is a listing of all account balances from the General Ledger as of a specific date. Click on any individual account balance to return to the General Ledger. The trial balance is only as accurate as the underlying journal entries. If the total debits do not equal the total credits, you must have a journal entry that is out of balance. If you have an abnormal ending balance (indicated with brackets in the general ledger), you should review the journal entries that affected that account to ensure that the journal entries are correct. The balance sheet is the accounting equation: Assets = Liabilities + Equity. Each asset and liability account is reported separately on the balance sheet. Equity includes common stock and the ending retained earnings amount from the Statement of Retained Earnings. Review the statement of retained earnings and indicate how the statement is linked to the other financial statements. Karla Tanner opens a web consulting business called Linkworks and completes the following transactions in its first month of operations. Prepare journal entries for each transaction and identify the financial statement impact of each entry The financial statements are automatically generated based on the journal entries recorded. April 1 Tanner invested $80,000 cash atong with office equipment valued at $26,000 in the company in exchange for comon stock. April 2 The company prepaid $9,000 cash for 12 months" rent for office space. The company's policy is to record prepaid expenses in batance sheet accounts. April 3. The company made credit purchases for $8,000 in office equipment and $3,600 in office supplies. Payment is due within 10 days. April 6 The company completed services for a client and immediately received $4,000 cash. April 9 The company completed a $6,600 project for a client, who must pay within 30 days. April 13 The company paid $11,600 cash to settle the account payable created on April 3 . April 19 The company paid $2,490 cash for the premium on a 12 -month prepaid insurance policy, The company's policy is to record prepaid expenses in batance sheet accounts. April 22 The company received $4,490 cash as partial payment for the work completed on April 9. April 25 The company completed work for another client for $2,890 on credit. April 28 The company paid $5,5e0 cash in dividends. April 29 The company purchased $600 of additional office supplies on credit. April 3 The company paid $435 cash for this month's utility bill. The trial balance is a listing of all account balances from the General Ledger as of a specific date. Click on any individual account balance to return to the General Ledger. The trial balance is only as accurate as the underlying journal entries. If the total debits do not equal the total credits, you must have a journal entry that is out of balance. If you have an abnormal ending balance (indicated with brackets in the general ledger), you should review the journal entries that sffected that account to ensure that the joumal entries are correct