The assets and liabilities of Morgan Dry Cleaners on October 1 of the current year are as follows: Cash, $1,000; Accounts Receivable, $2,200; Supplies, $850; Land, $11,450; Accounts Payable, $2,030. Morgan Dry Cleaners is a sole proprietorship owned and operated by M. A. Morgan. Currently, a building, delivery truck, and equipment are being rented, pending expansion to new facilities. The actual work of dry cleaning is done by another company at wholesale rates. Business transactions during October are summarized as follows: (a) Received cash from cash customers for dry cleaning sales, $4,928. (b) Paid creditors on account, $1,755. (c) Received cash from M. A. Morgan as an additional investment, $3,700. (d) Paid rent for the month, $1,200. (e) Charged customers for dry cleaning sales on account, $1,025. (f) Purchased supplies on account, $245. (g) Received cash from customers on account, $2,000. (h) Received monthly invoice for dry cleaning expense for October (to be paid on November 10), $1,635. (i) Paid the following: wages expense, $850; truck expense, $250; utilities expense, $325; miscellaneous expense, $75. (j) Determined, by taking an inventory, the cost of supplies used during the month, $115. Instructions: 1. Determine the amount of owner’s equity (M. A. Morgan’s capital) as of October 1 of the current year. 2. State the assets, liabilities, and owner’s equity as of October 1 in equation form similar to that shown in this chapter. In tabular form below the equation, indicate the increases and decreases resulting from each transaction and the new balances after each transaction. Explain the nature of each increase and decrease in owner’s equity by an appropriate notation at the right of the amount. 3. Prepare (a) an income statement for October, (b) a statement of owner’s equity for October, (c) a balance sheet as of October 31, and (d) a statement of cash flows for October.