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Draper Consulting began operations and completed the following transactions during the first half of December: Dec 2 Received $18,000 cash and gave capital to Draper. 2 Paid monthly office rent, $550. 3 Paid cash for a Dell computer, $1,800. This equipment is expected to remain in service for five years. 4 Purchased office furniture on account, $4,200. The furniture should last for five years. 5 Purchased supplies on account, $900. 9 Performed consulting service for a client on account, $1,500. 12 Paid utility expenses, $250. 18 Performed service for a client and received cash of $1,100. Requirements 1. Analyze the effects of Draper Consulting's transactions on the accounting equation. Use the format of Exhibit 1-6, and include these headings: Cash; Accounts receivable; Supplies; Equipment; Furniture; Accounts payable; and Draper, capital. 2. Prepare the income statement of Draper Consulting for the month ended December 31, 2012. 3. Prepare the statement of owner's equity for the month ended December 31, 2012. 4. Prepare the balance sheet at December 31, 2012.
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