Question

1. These financial statement items are for Regent Company at year-end, July 31, 2015.

Salaries and wages payable                      $ 2,980                    Notes payable (long-term)            $ 3,000

Salaries and wages expense                        45,700                    Cash                                                            5,200

Utilities expense                                              21,100                    Accounts receivable                             9,780

Equipment                                                         38,000                    Accumulated depreciation                 6,000

Accounts payable                                              4,100                    Dividends                                                  4,000

Service revenue                                               57,200                    Depreciation expense                          4,000

Rent revenue                                                       6,500                    Retained earnings                               28,000

Common stock                                             20,000                      (Aug. 1, 2014)

1. Prepare an income statement and a retained earnings statement for the year. Stockholders not make any new investments during the year.

2. Prepare a classified balance sheet at July 31.

Answer 1

Trial balance
	Dr.	Cr.
	$	$
Salaries and wages payable		2,980
Notes payable - long term		3,000
Salaries and wages expense	45,700
Cash	5,200
Utilities expense	21,100
Accounts receivable	9,780
Equipment	38,000
Accumulated dep		6,000
Accounts Payable		4,100
Dividends	4,000
Service revenue		57,200
Dep expense	4,000
Rent revenue		6,500
Retained earnings		28,000
Common stock		20,000
Total	127,780	127,780

Income statement for the year ending July 31, 2015 57,200 6,500 Service revenue Rent revenue less: expense Salaries Utilities Dep Total expense 45,700 21,100 4,000 -70,800 Net LOSS -7,100

statement of retained earnings: for the year ended July 31, 2015 Retained earnings at the beginning of the year Less: Net loss during the year Less: dividends expense Retained earnings at the end of the year 28,000 -7100 -4,000 16,900

Balance sheet as on July 31, 2015
	$	$
ASSETS
Current assets
Cash	5,200
Accounts Receivable	9,780
Total current assets		14,980
Fixed assets
Equipment	38,000
Accumulated dep	-6,000
Total fixed assets		32,000
Total Assets		46,980
Liabilities
Current Liabilities
Salaries and wages payable	2,980
Accounts payable	4,100
Total current liab		7,080
Long term liab
Notes payable	3,000
Total long term liabilities		3,000
Total liabilities		10,080
Owner's equity
Common stock		20,000
Retained earnings		16,900
Total owner's equity		36,900
Total liab and equity		46,980