3-6 Each account has a normal balance. Folowing the list of counts, indicate whether the normal balance of each is a debit or credit. Cash, Prepaid insurance, retained earnings, bonds payable, investments, captial stock, asvertising fees earned, wages and saleries expenses, wages and saleries payable, office suplies, and dividends. 3-9 The following list of accounts was taken from a general ledger of Spencer Corporation on Dec. 31, 2010. The bookkeeper thought it would be helpful if the accountants we arranged in alphabetical order. Each account contains a balance that is normal for that type of account. Prepare a trial balance as of this date with the accounts arranged in the following order, assets, liabilities, stockholders equity, revenues, expenses, and dividends. Accounts payable $7,650, accounts recievalbe $5,325, automobiles $9,200, Buildings $150,000, Capital stoch $100,000, Cash $10,500, Commissions expenses $2,600, Commissions revenue $12,750, dividends $ 2,000, Equipment $85,000, Heat, lights, and water expenses $1,400, Income tax expense $1,700, income tax payable $2,500, Interest revenue $1,300, Land $50,000, Notes Payable, $ 90,000, office saleries expense $ 6,000, office supplies $500, and Retaianed earnings $110,025. 3-2 May 1 Recieved contribution of $9,000 from each of the two principal owners of the new business exchange for shares of stock. May 1 Purchased ten bicycles for $300 each on an open account. The company has 30 days to pay for the bikes. May 5 Registered as a vendor with the sity and paid the $15 monthly fee. May 9 Purchased 20 pairs of in-line skates at $125 per pair, 20 helments at $50 each, and 20 sets of protective gear at $45 per set for cash. May 10Purchased #100 in Miscellaneous supplies on account. The company has 30 days to pay for the supplies. May 15 Paid $125 bill from local radio station for advertising for the last 2 weeks of May. May 17 Costomer rented In-line skates and bike for cash of $1,800. May 24 Billed the local park district $1,200 for in-line skating lessons prvided to neighborhood kids. The park district is to pay 1/2 of the bill within 5 working days and the rest within 30 days. May 29 Received 50% of the amount billed to the park district. May 30 Customer rented in-line skates and bikes for cash of $3,000. May 30 Paid wages of $160 to a friend who helped over the weekend. May 31 Paid the balance due on the bikes. Required 1. Prepare a table to summarize the preceding transactions as the affect the accounting equation. Identify each transaction with the date. 2. Prepare an income statement for the month ended May 31, 2010. 3. Prepare a classified balance sheet at May 31, 2010. 4. Why do you think the 2 college students decided to incorporate their business rather than operate it as a partnership?