The following amounts summarize the financial position of Blythe Spirit Consulting, Inc. on May 31, 2017:

During June 2017, the business completed these transactions:
a. Received cash of $5,000, and issued common shares.
b. Performed services for a client, and received cash of $7,600.
c. Paid $4,000 on accounts payable.
d. Purchased supplies on account, $1,500.
e. Collected cash from a customer on account, $1,000.
f. Consulted on the design of a business report, and billed the client for services rendered, $2,500.
g. Recorded the following business expenses for the month: paid office rent, $900; paid advertising, $300.
h. Declared and paid a cash dividend of $2,000.
Requirements
1. Analyze the effects of the preceding transactions on the accounting equation of Blythe
Spirit Consulting, Inc. Adapt the format of Exhibit 2-1, Panel B.
2. Prepare the income statement of Blythe Spirit Consulting, Inc. for the month ended June 30, 2017. List expenses in decreasing order by amount.
3. Prepare the entity's statement of retained earnings for the month ended June 30, 2017.
4. Prepare the balance sheet of Blythe Spirit Consulting, Inc. at June 30, 2017?

Transcribed Image Text:

ASSETS LIABILITIES SHAREHOLDERS' EQUITY Common Shares 4,000 Accounts Accounts Payable 8,000 Retained Earnings Receivable + Supplies Land Supplies + Land = 1,300 1,000 12,000