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Transaction Analysis

Torrey Mann began the Mann Word Processing Service in December 2015. The firm provides word-processing services for businesses and is currently operating with leased equipment On January 1, 2016, the assets and liabilities of the business were:

Cash	$7,300
Accounts Receivable	9,800
Accounts Payable	1,800
Notes Payable	4,400
Common Stock	10,900
Retained Earnings	-

The following transactions occurred during the month of January:

Jan	1	Paid rent on office and equipment for January, $1,800.
	2	Collected $7,400 on account from clients.
	3	Borrowed $5,900 from a bank and signed a note payable for that amount.
	4	Billed clients for work performed on account, $9,400.
	5	Paid $1,300 on accounts payable.
	6	Received invoice for January advertising, $1,650.
	7	Paid January salaries, $5,700.
	8	Paid January utilities, $1,130.
	9	Paid stockholders a dividend in the amount of $3,500.
	10	Purchased fax machine (on January 31) for business use, $2,300.
	11	Paid $180 to bank as January interest on the outstanding note payable.

Required

(a) Set up an accounting equation in columnar form with the following individual assets, liabilities, and stockholders' equity accounts: Cash, Accounts Receivable, Equipment, Accounts Payable, Notes Payable, Common Stock, and Retained Earnings. Enter the January 1 balances below each item. (Note: The beginning Equipment amount is $0.) (b) Show the impact (increase or decrease) of the January transactions on the beginning balances, and total all columns to show that assets equal liabilities plus stockholders' equity as of January 31.

	Cash	+	Accounts Receivable	+	Equipment	=	Accounts Payable	+	Notes Payable	+	Common Stock	+	Retained Earnings
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