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Analyzing Transactions Using the Financial Statement Effects Template Hanlon Advertising Company began the current month with the following balance sheet. Cash $ 80,000 Liabilities $ 70,000 Noncash assets 135,000 Contributed capital 110,000 Earned capital 35,000 Total assets $215,000 Total liabilities and equity $215,000 Following are summary transactions that occurred during the current month. 1. The company purchased supplies for $5,000 cash; none were used this month. 2. Services of $2,500 were performed this month on credit. 3. Services were performed for $10,000 cash this month. 4. The company purchased advertising for $8,000 cash; the ads will run next month. 5. The company received $1,200 cash as partial payment on accounts receivable from transaction 2. 6. The company paid $3,400 cash toward the accounts payable balance reported at the beginning of the month. 7. Paid $3,500 cash toward this month's wages expenses. 8. The company declared and paid dividends of $500 cash. (a) Record the effects of each transaction using the financial statement effects template. Use negative signs with your answers, when appropriate. Balance Sheet Income Statement Cash Asset Led + = + + Transactions Contributed Capital 110,000 Revenue - Expenses Transaction Beginning bal. = Net Income Noncash Assets 135,000 5,000 2,500 Liabilities 70,000 80,000 (5,000) Earned Capital 35,000 0 2,500 10,000 0 2 2,500 10,000 2,500 10,000 oooo O 5 vu w N 8,000 (1,200) 10,000 (8,000) 1,200 (3,400) (3,500) (500) 70,800 6 7 (3,400) 3,500 (3,500) 0 0 (3,500) (500) 43,500 Leave answers blank Leave answers blank Ending balance 149,300 66,600 110,000 0 (b) Prepare the income statement for this month and the balance sheet as of month-end. Do not use negative signs with any of your answers below. Hanlon Advertising Company Income Statement Sales revenue $ 12,500 Total expenses 3,500 Net income $ 9,000 Hanlon Advertising Company Retained Earnings Reconciliation Retained earnings. beginning of month $ Add: Net income Less: Dividends Retained earnings. end of month $ 35,000 9,000 (500) 43,500 Hanlon Advertising Company Balance Sheet Liabilities $ Contributed capital 70,800 Retained earnings 149,300 Total equity 220,100 Total liabilities and equity $ $ Cash Noncash assets 66,600 110,000 43,500 153,500 220,100 Total assets $