Mr. State started the C State Co., a new business that began operations on Dec. 1. The company completed the following transactions during its first month of operations.

a. Mr. State, owner, invested $13,250 cash in the company in exchange for common stock.

b. The company purchased office supplies for $384 cash.

c. The company purchased $327 of office supplies on credit.

d. The company received $1,563 cash as fees for services provided to a customer.

e. The company paid $327 cash to settle the payable for the office supplies purchased in transaction c.

f. The company billed a customer $2,809 as fees for services provided.

g. The company paid $530 cash for the monthly rent.

h. The company collected $1,180 cash as partial payment for the account receivable created in transaction f.

i. The company paid $1,000 cash in dividends to Mr. State.

Instructions:

Use the following accounts and show the effect of the transactions on the accounts of the equation by recording increases and decreases in the appropriate columns. Do not determine new account balances after each transaction. Determine the final balance for each account and verify that the equation is in balance.

Cash, Accounts Receivable, Office Supplies, Accounts Payable, Common Stock, Dividends, Revenues, and Expenses

Prepare an income statement for December.