Question

operating activity

Exercise 1-3 Use the following accounts and information to prepare, in good form, an income statement and a retained earnings statement, for the month of August and a balance sheet at August 31, 2017 for Pierce Industries. Accounts payable Accounts receivable Buildings Cash Service revenue Common stock 1,100 5,400 63,000 18,600 25,700 52,000 25,900 Dividends Insurance expense Supplies Notes payable Rent expense Salaries and wages expense $ 3,000 1,200 1,400 3,300 3,400 12,000 Retained earnings (beginning)

Answer 1

Pierce Industries
Income Statement                   For the Month ended August
Particulars
Revenue
Service Revenue	$ 25700
Total Revenue		$ 25,700
Expenses
Salaries and Wages	$ 12000
Rent	$   3400
Supplies	$   1400
Insurance	$ 1200
Total Expenses		$18,000
NET INCOME		$ 7,700

Pierce Industries
Retained Earnings Statement                   For the Month ended August
Retained earnings at the beginning of the period	$ 25900
Add: Net Income	$ 7,700
Less: Dividends	($ 3,000)
Retained earnings at the end of the period	$30,600

Pierce Industries
Balance sheet as at 31 august
Assets	Amount ($)	Liabilities&Stockholder’s Equity
Current Assets		Liabilities
Cash	$ 18,600	Notes Payable	$ 3,300
Accounts Receivables	$   5,400	Accounts Payable	$ 1,100
Total Current Assets	$ 24,000	Total Liabilities	$ 4,400
Non-Current Assets		Stockholder’s Equity
Buildings	$ 63,000	Capital Stock	$ 52,000
Total Non-Current Assets	$ 63,000	Retained Earnings	$ 30,600
Total Assets	$ 87,000	Total Liabilities & Stockholder’s Equity	$ 87,000