Prepare the income statement for this month and the balance

Question

Analyzing Transactions Using the Financial Statement Effects Template 

Hanlon Advertising Company began the current month with the following balance sheet. 

Cash	$ 80,000	Liabilities	$ 70,000
Noncash assets	135,000	Contributed capital	110,000
	Earned capital	35,000
Total assets	$215,000	Total liabilities and equity	$215,000

Following are summary transactions that occurred during the current month.

1. The company purchased supplies for $5,000 cash; none were used this month.
2. Services of $2,500 were performed this month on credit.
3. Services were performed for $10,000 cash this month.
4. The company purchased advertising for $8,000 cash; the ads will run next month.
5. The company received $1,200 cash as partial payment on accounts receivable from transaction 2.
6. The company paid $3,400 cash toward the accounts payable balance reported at the beginning of the month.
7. Paid $3,500 cash toward this month's wages expenses.
8. The company declared and paid dividends of $500 cash. 

(a) Record the effects of each transaction using the financial statement effects template.

(b) Prepare the income statement for this month and the balance sheet as of month-end.