Question

Use the following information to prepare Balance Sheet for ABC for the month ended December 31. Telephone expense $ 1,150 Cash 3,000 Accounts payable 1,540 Dividends 800 Fees earned 15,700 Rent expense 1,400 Supplies 140 Accounts receivable 1,500 Computer equipment 17,600 Common stock 10,000 Retained earnings (August 1) 4,320 Wages expense 4,800 Utilities expense 750 Office expense 420 ​

2. Selected transactions from ABC Company from the first month of operations are as fallow: (1) Stockholders invested $12,500 cash in the business by purchasing common stock. (2) Purchased supplies on account, $6,250. (3) Paid operating expenses, $5,500. (4) Billed clients for fees, $7,440. (5) Received cash from cash clients, $4,700. (6) Paid creditors on account, $1,400. (7) Received $3,100 from clients on account. (8) Paid $1,500 cash dividends. Set up T accounts for Cash; Accounts Receivable; Supplies; Accounts Payable; Common Stock; Dividends; Professional Fees; and Operating Expenses. Record those transactions using T accounts Prepare a trail balance as of January 31

3. Use the following information to prepare an income statement for the current year ended December 31.

Use this information to answer the questions that follow. Accounts payable $ 2,000 Miscellaneous expense $ 1,030 Accounts receivable 10,340 Office expense 1,240 Cash 21,420 Supplies 1,670 Fees earned 73,450 Wages expense 23,550 Land 47,000 Dividends 16,570 Building 157,630 ​

Answer 1

1 ABC Balance Sheet December 31 Assets Current Assets: Cash Accounts Receivable Supplies $3,000 $1,500 $1401 $17,600 $22,240 Plant, Property and Equipment; Computer equipment Total Assets Liabilities Current Liabilities: Accounts payable $1,540 Stockholders' Equity Common stock $10,000 Retained Earnings $10,700 Total Stockholders' Equity Total Liabilities and Stockholders' Equity $20,700 $22,240 Working notes: $15,700 ABC Income Statement For The Month Ended December 31 Fees Earned Expenses: Telephone expenses $1,150 Rent expense $1,400 Wages expense $4,800 Utliities expense $750 Office expense $420 Total expenses Net Income $8,5201 $7,1801 ABC Statement of Retained Earnings For The Month Ended December 31 Opening balance, Retained Earnings Net Income $4,320 $7,180 $11,500 -$800 $10,700 Dividend paid Closing balance, Retained Earnings

2 AT- Accounts Accounts Receivable $7,440 Cash Professional fees $3,100 Common stock Sales (Cash) Accounts Receivable Cash $12,500 Operating expenses $4,700 Accounts payable $3,100 Dividend $5,500 $1,400 $1,500 End Bal $4,340 End Bal $11.900 Supplies $6,250 Accounts payable $1,400 Supplies Accounts payable Cash $6,250 End Bal $6,250 End Bal $4,850 Common stock Cash Dividends $1,500 $12,500 Cash End Bal $12,500 End Bal $1,500 Operating expenses $5,500 Cash Professional Fees Accounts Receivable Cash End Bal $7,440 $4,700 $12,140 End Bal $5,500 B Credit Trial balance As on January 31 Debit Cash $11,900 Accounts Receivable $4,340 Supplies $6,250 Accounts Payable Common stock Dividend $1,500 Professional fees Operating expenses $5,500 Total $29,4901 $4,850 $12,500 $12, 140 $29,490 3 Income Statement For The Month Ended December 31 Fees Earned $73,450 Expenses: Wages expense $23,550 Office expense $1,240 Miscellaneous expense $1,030 Total expenses $25,820 Net Income $47,630