Neal Hastings established Ember Services, P.C., a professional corporation, on January 1 of the current year. Ember Services offers financial planning advice to its clients. The effect of each transaction on the balance sheet and the balances after each transaction for January are as follows. Each increase or decrease in stockholders' equity, except transaction (h), affects net income.
Assets Liabilities + Stockholders' Equity
|
a.
b.
|
Cash
+20,000
|
+
|
Accounts Receivable
|
+
|
Supplies
+900
|
Accounts Payable
+900
|
+
|
Capital Stock
+20,000
|
+
|
Retained Earnings
|
|
Bal.
|
20,000
|
|
|
|
900
|
900
|
|
20,000
|
|
|
|
c.
|
-775
|
|
|
|
|
-775
|
|
|
|
|
|
Bal. d.
|
19,225
+11,500
|
|
|
|
900
|
125
|
|
20,000
|
|
+11,500
|
|
Bal.
|
30,725
|
|
|
|
900
|
125
|
|
20,000
|
|
11,500
|
|
e.
|
-7,500
|
|
|
|
|
|
|
|
|
-7,500
|
|
Bal.
|
23,225
|
|
|
|
900
|
125
|
|
20,000
|
|
4,000
|
|
f.
|
|
|
|
|
-625
|
|
|
|
|
-625
|
|
Bal. g.
|
23,225
|
|
+3,000
|
|
275
|
125
|
|
20,000
|
|
3,375
+3,000
|
|
Bal.
|
23,225
|
|
3,000
|
|
275
|
125
|
|
20,000
|
|
6,375
|
|
h.
|
-1,000
|
|
|
|
|
|
|
|
|
-1,000
|
|
Bal.
|
22,225
|
|
3,000
|
|
275
|
125
|
|
20,000
|
|
5,375
|
a. Describe each transaction.
b. What is the amount of the net income for January?