Question

On June 1, 2022, Crane Company was started with an initial investment in the company of $21,725 cash. Here are the assets, liabilities, and common stock of the company at June 30, 2022, and the revenues and expenses for the month of June, its first month of operations:

Cash		$ 4,960		Notes payable		$12,720
Accounts receivable		4,400		Accounts payable		900
Service revenue		7,900		Supplies expense		1,155
Supplies		2,292		Maintenance and repairs expense		690
Advertising expense		400		Utilities expense		210
Equipment		26,300		Salaries and wages expense		1,100
Common stock		21,725

During June, the company issued no additional stock but paid dividends of $1,738.

Prepare an income statement for the month of June.

  

Prepare a retained earnings statement for the month of June. (List items that increase retained earnings first.)

Prepare a balance sheet at June 30, 2022. (List assets in order of liquidity.)

Answer 1

$7,900 (a) Prepare an income statement for the month of June. CRANE COMPANY 'Income Statement For the Month Ended June 30, 2022 Revenues Service revenue Expenses Advertising expense Supplies expense Maintenance and repairs expense Utilities expense Salaries and wages expense Total expenses Net Incomel (Loss) $400 1,155 690 210 1,100 3,555) $4,345

(b) Prepare a retained earnings statement for the month of June. CRANE COMPANY Retained Earnings Statement For the Month Ended June 30, 2022 Retained earnings, June 1 Add: Net incomel (Loss) 4,345 4,345 1,738 $2,607 Less: Dividends Retained earnings, June 30 (c) Prepare a balance sheet at June 30, 2022. (List assets in order of liquidity.).

$4,960 4,400 2,292 26,300 $37,952 CRANE COMPANY Balance Sheet June 30, 2022 Assets Cash Accounts receivable Supplies Equipment Total Assets Liabilities and Stockholders' Equity Liabilities Notes payable Accounts payable Total liabilities Stockholders' equity Common stock Retained earnings Total stockholders' equity Total Liabilities and Stockholders' Equity $12,720 900 $13,620 21,725 2,607 24,332 $37,952