Question

where are the rest of the question like E3-2 E3-3...

Explain. Exercises E3-1 Transactions using accrual accounting Derma Care is owned and operated by Marilyn McColley, the sole stockholder. During February 2013, Derma Care entered into the following transactions: a. Marilyn McColley invested $30,000 in Derma Care in exchange for capital stock. b. Paid $7,200 on February 1 for an insurance premium on a 1-year policy. c. Purchased supplies on account, $1,200. d. Received fees of $43,500 during February. e. Paid expenses as follows: wages, $8,000; rent, $2,500; utilities, $1,000; and miscel- laneous, $850. f. Paid dividends of $5,000. Record the preceding transactions using the integrated financial statement framework. After each transaction, you should enter a balance for each item. E3-2 Adjustment process Using the data from Exercise 3-1, record the adjusting entries at the end of February to record the insurance expense and supplies expense. There was $800 of supplies on hand as of February 28. Identify the adjusting entry for insurance as (al) and supplies as (a2). E3-3 Financial statements Using the data from Exercises 3-1 and 3-2, prepare financial statements for February, including income statement, retained earnings statement, balance sheet, and state- ment of cash flows.

Answer 1

a. Solution: Asset (cash) is increased, and stockholder’s equity (capital stock) is increased with the amount of $30,000

b. Solution: Asset (cash) is decreased, and asset (prepaid insurance) is increased with the amount of $7,200

c. Solution: Asset (supplies) is increased, and liabilities (accounts payable) is increased with the amount of $1,200

d. Solution: Asset (cash) is increased, and asset (accounts receivables) is increased with the amount of $43,500

e. Solution: Asset (cash) is decreased, and stockholder’s equity (retained earnings) is decreased with $12,350

f. Solution: Asset (cash) is decreased, and stockholder’s equity (retained earnings) is decreased with $5,000

Income statement		36,500
Sales commission
Operating Expenses:
Salaries expense	-12000
Rent expense	-2000
Utilities expense	-1,000
Miscellaneous expense	-1,100
Insurance expense	-350
Supplies expense	-300
Total operating expenses		-16,750
Net income		19,750

Retained Earnings Statement
Net income for April	19,750
Less: Dividends	7,500
Retained earnings, February 28th	12,250

As per policy we haver to answer first question