An analysis of the transactions made by Cookie Mountain Legal, a law firm, for the month of July is shown below. Each increase and decrease in retained earnings is explained. 
Instructions
Prepare a balance sheet at July 31, 2018.
Definitions:
Variable Overhead
Costs that change in proportion to the activity or volume of production, such as utilities or indirect materials.
Direct Material
The raw materials directly used in the manufacturing of a product, which are easily traceable to the finished product.
Direct Labor-Hours
Direct labor-hours are the total time workers spend creating a product or providing a service, directly correlated to the volume of production.
Variable Overhead
Indirect production costs that vary with the level of output, such as utilities or indirect materials used in the production process.
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