Using transactions (a)–(j) in P1-54B, answer the following questions:

In P1-54B, a. Heidi began her business by depositing $22,000 into the business checking account in exchange for common stock.

b. The shop paid travel expenses in the amount of $325.

c. The shop borrowed $12,000 from the bank for operating capital.

d. The shop purchased $600 worth of office supplies (for future use) from Office Supermarket for cash.

e. During the month, the shop earned revenue of $10,000 cash.

f. The shop paid the monthly rent on the retail space in the amount of $1,100.

g. The shop paid the staff $2,000.

h. Other operating expenses for the month were $1,375, which were paid in cash.

i. On the last day of the month, the shop purchased equipment costing $10,000 by signing a note payable with the bank.

j. The company declared and paid a dividend of $235 to Heidi, the firm’s only shareholder.

Requirements

1. What is the cash balance at the end of Heidi’s Smoothy Shop’s first month of business?

2. Does the shop have any liabilities at the end of the first month of business? If so, how much?

3. Which assets will appear on the balance sheet at the end of the shop’s first month of business?

4. Did Heidi’s generate a net income or a net loss during its first month of business? How much?