The following cash transactions took place during March, the first month of business for Cats and Dogs Company:

The following cash transactions took place during March, the first month of business for Cats and Dogs Company:

1.      D.C. Dawg started a business, Cats and Dogs Company, by contributing $6,000.

2.      The Cats and Dogs Company borrowed $2,000 from the bank on March 1. The note is a 1-year, 12% note, with both principal and interest to be repaid on February 28 of next year.

3.      The company earned $900 in revenue.

4.      Expenses amounted to $650.

5.      Distributions to owners amounted to $25.

You are to complete the following tasks:

1.      Show how each cash transaction affects the accounting equation.

2.      Give one additional piece of information related to the transaction that could be recorded in an information system for a purpose other than the financial statements.

3.      Prepare the four basic financial statements for the month of March.