Hart, Attorney at Law, experienced the following transactions in Year 1, the first year of operations:

1. Accepted $15,200 on April 1, Year 1, as a retainer for services to be performed evenly over the next 12 months
2. Performed legal services for cash of $68,000
3. Purchased $1,400 of office supplies on account
4. Paid $1,260 of the amount due on accounts payable
5. Paid a cash dividend to the stockholders of $5,600
6. Paid cash for operating expenses of $19,600
7. Determined that at the end of the accounting period $120 of office supplies remained on hand
8. On December 31, Year 1, recognized the revenue that had been earned for services performed in accordance with Transaction 1.

Show the effects of the events on the financial statements using a horizontal statement model.

Explanation:

                    Asset     liability     equity       Revenue    Expenses

1)                    15200                   ( 15200)         (15200)

2)                   68000                     68000        68000

3)                      1400       1400                                                 1400      

4                      (1260)      (1260)                                               1260

5                     (5600)                      (5600)                              5600

6                    (19600)                      (19600)                             19600

7                      (1280)                       (1280)                                1400      

8                                                       11400           11400                            

                     56860         140          37720         64200            29260