On January 1, 2012, Carlton Myers established Vista Realty. Carlton completed the following transactions during the month of January:
a. Opened a business bank account with a deposit of $25,000 in exchange for capital stock.
b. Purchased supplies (pens file folders, paper, etc.) on account, $2,500.
c. Paid creditor on account, $1,600.
d. Earned sales commissions, receiving cash, $25,500.
e. Paid rent on office and equipment for the month, $5,000.
f. Paid dividends $8,000.
g. Paid automobile expenses (including rental charge) for month, $2,500, and miscellaneous expenses, $1,200.
h. Paid office salaries, $3,000.
i. Determined that the cost of supplies on hand was $850; therefore, the cost of supplies used was $1,650.
Instructions
1. Indicate the effect of each transaction and the balances after each transaction, using the following tabular headings:
2. Prepare an income statement for January, a retained earnings statement for January, and a balance sheet as of January31.