On July 1, K. Resser opened Resser’s Business Services. Resser’s accountant listed the following chart of accounts:

The following transactions were completed during July:

a. Resser deposited $25,000 in a bank account in the name of the business.

b. Bought tables and chairs (Furniture and Fixtures) for cash, $725, Ck. No. 1200.

c. Paid the rent for the current month, $1,750, Ck. No. 1201.

d. Bought computers and copy machines (Equipment) from Ferber Equipment, $15,700, paying $4,000 in cash and placing the balance on account, Ck. No. 1202.

e. Bought supplies on account from Wiggins’s Distributors, $535.

f. Sold services for cash, $1,742.

g. Bought insurance for one year, $1,375, Ck. No. 1203.

h. Paid on account to Ferber Equipment, $700, Ck. No. 1204.

i. Received and paid the electric bill, $438, Ck. No. 1205.

j. Paid on account to Wiggins’s Distributors, $315, Ck. No. 1206.

k. Sold services to customers for cash for the second half of the month, $820.

l. Received and paid the bill for the business license, $75, Ck. No. 1207 (Miscellaneous Expense).

m. Paid wages to an employee, $1,200, Ck. No. 1208.

n. Resser withdrew cash for personal use, $700, Ck. No. 1209.

Required

1. Record the owner’s name in the Capital and Drawing T accounts.

2. Correctly place the plus and minus signs for each T account and label the debit and credit sides of the accounts.

3. Record the transactions in the T accounts. Write the letter of each entry to identify the transaction.

4. Foot the T accounts and show the balances.

5. Prepare a trial balance as of July 31, 20—.

6. Prepare an income statement for July 31, 20—.

7. Prepare a statement of owner’s equity for July 31, 20—.

8. Prepare a balance sheet as of July 31, 20—.