Analyzing Transactions Using the Financial Statement Effects Template

Hanlon Advertising Company began the current month with the following balance sheet.

Cash$ 80,000Liabilities$ 70,000Noncash assets135,000Contributed capital110,000Earned capital35,000Total assets$215,000Total liabilities and equity$215,000

Following are summary transactions that occurred during the current month.

1. The company purchased supplies for $12,500 cash; none were used this month.
2. Services of $6,250 were performed this month on credit.
3. Services were performed for $25,000 cash this month.
4. The company purchased advertising for $20,000 cash; the ads will run next month.
5. The company received $3,000 cash as partial payment on accounts receivable from transaction 2.
6. The company paid $8,500 cash toward the accounts payable from the prior month.
7. Paid $7,750 cash toward this month's wages expenses.
8. The company declared and paid dividends of $1,250 cash.

(b) Prepare the income statement for this month and the balance sheet as of month-end.

Do not use negative signswith any of your answers below.

Hanlon Advertising Company

Income StatementSales revenue$Total expenses

Net income$

Hanlon Advertising Company

Retained Earnings Reconciliation

Retained earnings. beginning of month$Net incomeDividends

Retained earnings. end of month$

Hanlon Advertising Company

Balance Sheet

Cash$Noncash assetsTotal assets$Liabilities$Contributed capitalRetained earningsTotal equityTotal liabilities and equity$