5. Transaction analysis and statement preparation. The transactions that follo

5. Transaction analysis and statement preparation. The transactions that follow

relate to Burton Enterprises for March 20X1 the company%u2019s first month of activity.

3/1: Joanne Burton the owner invested $20000 into the business for $20000 of Common Stock.

3/4: Performed $2400 of services on account.

3/7: Acquired a small parcel of land by paying $6000 cash.

3/12: Received $700 from a client who was billed previously on March 4.

3/15: Paid $800 to the Journal Herald for advertising expense.

3/18: Acquired $9000 of equipment from Park Central Outfitters by paying

$7000 down and agreeing to remit the balance owed within the next

2 weeks (Accounts Payable).

3/22: Received $300 cash from clients for services.

3/24: Paid $1500 on account to Park Central Outfitters in partial settlement

of the balance due from the transaction on March 18.

3/28: Rented a car from United Car Rental for use on March 28. Total charges

amounted to $75 with United billing Burton for the amount due.

3/31: Paid $900 for March wages.

3/31: Processed a $600 cash withdrawal (dividend) from the business for Joanne Burton.

Instructions

a. Determine the impact of each of the preceding transactions on Burton%u2019s assets

liabilities and owner%u2019s equity. See exhibit 1.5. Use the following format:

Assets = Liabilities + Owner%u2019s Equity

Cash Accounts Receivable Land Equipment Accounts Payable (+)Common Stock (+) Revenues

(-) Dividends (-) Expenses

a. Record each transaction on a separate line. Calculate balances only after the last transaction has been recorded.

b. Prepare an income statement a statement of retained earnings and a balance sheet (See Exhibit 1.2 1.3 and 1.4).