Question

Comprehensive Accounting Cycle Review 5-02 (Part Level Submission) On November 1, 2022, Larkspur had the following account balances. The company uses the perpetual inventory method. Debit Credit $26,100 Accumulated Depreciation-Equipment Cash $2,900 6,496 Accounts Payable 9,860 Accounts Receivable 11,600 Supplies 2,494 Unearned Service Revenue Equipment 72,500 Salaries and Wages Payable 4,930 $107,590 Common Stock 58,000 Retained Earnings 20,300 $107,590 During November, the following summary transactions were completed. Paid $10,295 for salaries due employees, of which $5,365 is for November and $4,930 is for October. Nov. 8 Received $5,510 cash from customers in payment of account. 10 Purchased merchandise on account from Dimas Discount Supply for $23,200, terms 2/10, n/30. 11 Sold merchandise on account for $15,950, terms 2/10, n/30. The cost of the merchandise sold was $11,600o. 12 Received credit from Dimas Discount Supply for merchandise returned $870. 15 Received collections in full, less discounts, from customers billed on sales of $15,950 on November 12 19 Paid Dimas Discount Supply in full, less discount. 20 Received $6,670 cash for services performed in November. 22 Purchased equipment on account $14,500. 25 Purchased supplies on account $4,930. 27 Paid creditors $8,700 of accounts payable due. 28 Paid November rent $1,087. 29 Paid salaries $3,770. 29 Performed services on account and billed customers $2,030 for those services. 29 Received $1,958 from customers for services to be performed in the future. 29

Answer 1

Income Statement:

LARKSPUR
Income Statement
For the month ended Nov,2022
Revenues:
Sales	$15,950
(Less): Sales discounts	($319)
Net sales		$15,631
Service revenue		$20,373
Total revenues		$36,004
(less): Cost of goods sold		($11,600)
Gross profit		$24,404
Operating expenses:
Depreciation expense	$725
Supplies expense	$2,784
Salaries and wages expense	$10,585
Rent expense	$1,087
Total operating expenses		$15,181
Net income		$9,223

Balance Sheet:

LARKSPUR
Statement of Retained Earnings
For the month ended Nov,2022
Retained earnings, Nov.1,2022	$20,300
Add: Net income	$9,223
Retained earnings, Nov.30,2022	$29,523