An analysis of the transactions made by K. T. Lang & Co., a law firm, for the month of July is shown below. Each increase and decrease in equity is explained. 
Instructions
(a) Prepare an income statement for the month ending July 31, 2014.
(b) Prepare a retained earnings statement for the month ending July 31, 2014.
Definitions:
Involuntary
Occurring without an individual's consent or will.
Uniform Commercial Code
A comprehensive set of laws governing all commercial transactions in the United States, intended to standardize and simplify the law across the country.
Default
A failure to fulfill a legal obligation or agreement, such as not making a scheduled loan payment on time.
Bankruptcy Abuse Prevention and Consumer Protection Act
A law enacted in 2005 aimed at reforming the bankruptcy system, making it more difficult for individuals to file for Chapter 7 bankruptcy and encouraging Chapter 13 filings.
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