Analyzing Transactions Using the Financial Statement Effects Template and Preparing an Income Statement (FSET) On December 1, R. Lambert formed Lambert Services, which provides career and vocational counseling services to graduating college students. The following transactions took place during December, and company accounts include the following: Cash, Accounts Receivable, Land, Accounts Payable, Notes Payable, Common Stock, Retained Earnings, Counseling Services Revenue, Rent Expense, Advertising Expense, Interest Expense, Salary Expense, and Utilities Expense. (1) Raised $21,000 cash through common stock issuance. (2) Paid $2,250 cash for supplies and training materials. (3) Received $1,500 invoice for December advertising expenses. (4) Borrowed $45,000 cash from bank and signed note payable for that amount. (5) Received $3,600 cash for counseling services rendered. (6) Billed clients $20,400 for counseling services rendered. (7) Paid $6,600 cash for secretary salary. (8) Paid $1,110 cash for December utilities. (9) Declared and paid a $2,700 cash dividend. (10) Purchased land for $39,000 cash to use for its own facilities. (11) Paid $300 cash to bank as December interest expense on note payable. Required a. Report the effects for each of the separate transactions 1 through 11 using the financial statement effects template. Total all columns and prove that (1) assets equal liabilities plus equity at December 31, and (2) revenues less expenses equal net income for December. Note: Use a negative sign with your answers, when appropriate. Balance Sheet Income Statement Transaction Cash Asset + Noncash Assets Contributed Earned = Liabilities + Capital + Capital Revenue Expenses (1) Issued common stock $21,000. 21,000 + 0 = 0 + 21,000 + 0 21,000 = Net Income 0 = 21,000 (2) Paid $2,250 for supplies and training materials. (2,250) + 2,250 0+ 0+ 0 0 0 = 0 Received $1,500 invoice for advertising expense. 0+ 0 = 0 + 0+ 0 0 0 = 0 (4) Borrowed $45,000 cash from bank. 45,000 + 0 = 45,000 + 0+ 0 0 0 = 0 (5) $3,600 cash received for services. 3,600 + 0 = 0 + 0 + 3,600 3,600 0 3,600 (6) Billed clients $20,400 for services. 0+ 0 = 0 + 0+ 0 20,400 0 = 20,400 (7) Paid $6,600 cash for salary. (6,600) + 0 = (6,600) + 0+ 0 0 6,600 6,600 (8) Paid $1,110 cash for utilities. (1,110) + 0 = (1,110) + 0 + 0 0 1,110 = 1,110 (9) Paid $2,700 cash dividend. (2,700) + 0 = 0 + (2,700) + 0 0 0 0 (10) Acquired land for $39,000. (39,000) + 39,000 0+ 0+ 0 0 0 = 0 (11) Paid $300 interest in cash. (300) + TOTALS $ 17,640 + $ 0 = 41,250 = $ (300) + 0 + 0 0 300 = (300) 36,990 + $ 18,300 + $ 3,600 $ 45,000 $ 0 = $ 36,990 b. Prepare an income statement for the month of December. Note: Do not use negative signs with any of your answers. Lambert Services Income Statement For the Month of December Counseling Services Revenue Expenses Supplies Expense Advertising Expense Salary Expense Utilities Expense Interest Expense Total Expenses Net Income tA $ 0 0 0 11,210 300 +A $ 45,000 8,010 $ 36,990