Shelly Herzog opens a research service near a college campus

Shelly Herzog opens a research service near a college campus. She names the corporation Herzog Researchers, Inc. During the first month of operations, July 20X3, the business engages in the following transactions:

a. Herzog Researchers, Inc., issues its common stock to Shelly Herzog, who invests $25,000 to open the business.

b. The company purchases on account office supplies costing $350.

c. Herzog Researchers pays cash of $20,000 to acquire a lot next to the campus. The company intends to use the land as a building site for a business office.

d. Herzog Researchers performs research for clients and receives cash of $1,900.

e. Herzog Researchers pays $100 on the account payable it created in transaction b.

f. Herzog pays $2,000 of personal funds for a vacation.

g. Herzog Researchers pays cash expenses for office rent ($400) and utilities ($100).

h. The business sells a small parcel of the land for its cost of $5,000.

i. The business declares and pays a cash dividend of $1,200.

Required

1. Analyze the preceding transactions in terms of their effects on the accounting equation of Herzog Researchers, Inc. Use Exhibit 2-1, Panel B as a guide.

2. Prepare the income statement, statement of retained earnings, and balance sheet of Herzog Researchers, Inc., after recording the transactions. Draw arrows linking the statements.