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S: SET A Analyze transactions and compute net income. (LO 3, 4) XLS Check figures provide a key number to let you know you are on the right track. (a) Total assets $20,800 (b) Net income $6,200 Analyze transactions and prepare income statement, owner's equity statement, and balance sheet. (LO 3, 4, 5) XLS P1-1A On April 1, Julie Spengel established Spengel's Travel Agency. The following trans- actions were completed during the month. 1. Invested $15,000 cash to start the agency. 2. Paid $600 cash for April office rent. 3. Purchased equipment for $3,000 cash. 4. Incurred $700 of advertising costs in the Chicago Tribune, on account. 5. Paid $900 cash for office supplies. 6. Performed services worth $10,000: $3,000 cash is received from customers, and the balance of $7,000 is billed to customers on account. 7. Withdrew $600 cash for personal use. 8. Paid Chicago Tribune $500 of the amount due in transaction (4). 9. Paid employees' salaries $2,500. 10. Received $4,000 in cash from customers who have previously been billed in transac- tion (6). Instructions (a) Prepare a tabular analysis of the transactions using the following column headings: Cash, Accounts Receivable, Supplies, Equipment, Accounts Payable, Owner's Capital, Owner's Drawings, Revenues, and Expenses. (b) From an analysis of the owner's equity columns, compute the net income or net loss for April. P1-2A Judi Salem opened a law office on July 1, 2017. On July 31, the balance sheet showed Cash $5,000, Accounts Receivable $1,500, Supplies $500, Equipment $6,000, Accounts Payable $4,200, and Owner's Capital $8,800. During August, the following trans- actions occurred. 1. Collected $1,200 of accounts receivable. 2. Paid $2,800 cash on accounts payable. 3. Recognized revenue of $7,500 of which $3,000 is collected in cash and the balance is due in September. 4. Purchased additional equipment for $2,000, paying $400 in cash and the balance on account. 5. Paid salaries $2,500, rent for August $900, and advertising expenses $400. Problems: Set A 41 6. Withdrew $700 in cash for personal use. 7. Received $2,000 from Standard Federal Bank-money borrowed on a note payable. 8. Incurred utility expenses for month on account $270. Instructions (a) Prepare a tabular analysis of the August transactions beginning with July 31 balances. The column headings should be as follows: Cash + Accounts Receivable + Supplies + Equipment Notes Payable + Accounts Payable + Owner's Capital - Owner's Draw- ings +Revenues - Expenses. (b) Prepare an income statement for August, an owner's equity statement for August, and a balance sheet at August 31. (a) Total assets $16,800 (b) Net income $3,430 Ending capital $11,530 Description P1-2A TABULAR ANALYSIS INCOME STATEMENT OWNER'S EQUITY STATEMENT AND BALANCE SHEET

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