After several months of planning, Jasmine Worthy started a haircutting business called Expressions. The following events occurred during its first month of business.

a. On August 1, Worthy invested $3,000 cash and $15,000 of equipment in Expressions.

b. On August 2, Expressions paid $600 cash for furniture for the shop.

c. On August 3, Expressions paid $500 cash to rent space in a strip mall for August.

d. On August 4, it purchased $1,200 of equipment on credit for the shop (using a long-term note payable).

e. On August 5, Expressions opened for business. Cash received from haircutting services in the first week and a half of business (ended August 15) was $825.

f. On August 15, it provided $100 of haircutting services on account.

g. On August 17, it received a $100 check for services previously rendered on account.

h. On August 17, it paid $125 cash to an assistant for hours worked during the grand opening.

i. Cash received from services provided during the second half of August was $930.

j. On August 31, it paid a $400 installment toward principal on the note payable entered into on August 4.

k. On August 31, Worthy made a $900 cash withdrawal from the company for personal use.

Required

1. Arrange the following asset, liability, and equity titles in a table similar to the one Cash; Accounts Receivable; Furniture; Store Equipment; Note Payable; J. Worthy, Capital; J. Worthy, Withdrawals; Revenues; and Expenses. Show the effects of each transaction using the accounting equation.

2. Prepare an income statement for August.

3. Prepare a statement of owner’s equity for August.

4. Prepare a balance sheet as of August 31.

5. Prepare a statement of cash flows for August.

6. Determine the return on assets ratio for August.