Question

P1-3C On June 1, Laurie Shaw started Fancy Cosmetics Co., a company that provides individual skin care treatment, by investing $26,200 cash in the business. Following are the assets and liabilities of the company at June 30 and the revenues and expenses for the month of June. Cash $11,000 Notes Payable $13,000 Accounts Receivable 4,000 Accounts Payable 1,200 Service Revenue 6,000 Supplies Expense 1,600 Supplies 2,000 Gasoline Expense 800 Advertising Expense 500 Utilities Expense 300 Equipment 25,000 Laurie Shaw made no additional investment in June, but withdrew $1,200 in cash for personal use during the month. Instructions (a) Prepare an income statement and owner's equity statement for the month of June and a balance sheet at June 30, 2017 (b) Prepare an income statement and owner's equity statement for June assuming the following data are not included above: (1) $800 of revenue was earned and billed but not collected at June 30, and (2) $100 of gasoline expense was incurred but not paid.

Answer 1

Req a

Fancy Cosmetics Co.
Income Statement
For the Month Ended June 30, 2017
Revenues
Service Revenue		6,000
Expenses
Supplies expense	1,600
Gasoline expense	800
Advertising expense	500
Utilities expense	300
Total Expenses		3,200
Net Income		2,800
Statement of Owners Equity
For the Month Ended June 30, 2017
Capital, June 1, 2017		-
Add: Investments		26,200
Add: Net Income		2,800
Subtotals		29,000
Less: Withdrawals		(1,200)
Capital, June 30, 2017		27,800

Fancy Cosmetics Co. Balance Sheet As of June 30, 2017 Assets Current Assets Cash Accounts Receivable Supplies Total Current Assets Liabilities & Owners Equity Liabilities 11,000 Accounts Payable 4,000 Notes Payable 2,000 17,000 Total Liabilities 1,200 13,000 14,200 Property, Plant & Equipment Equipment Owners Equity 25,000 Capital 27,800 Total Assets 42,000 Total Liabilities & Owners Equity 42,000

Req b

Fancy Cosmetics Co.
Income Statement
For the Month Ended June 30, 2017				Calculation
Revenues
Service Revenue		6,800		=6,000+800
Expenses
Supplies expense	1,600
Gasoline expense	900			=800+100
Advertising expense	500
Utilities expense	300
Total Expenses		3,300
Net Income		3,500
Statement of Owners Equity
For the Month Ended June 30, 2017
Capital, June 1, 2017		-
Add: Investments		26,200
Add: Net Income		3,500
Subtotals		29,700
Less: Withdrawals		(1,200)
Capital, June 30, 2017		28,500