Question

planations for any changes in Retained Earnings. are an income statement for the month of May 2022. 6. Prer a classified balance sheet at May 31, 2022. STOCK Retained Earnings + Revenues - Expenses - Dividends entre arnings GLS Excel PS .2), AP Bindy Crawford created a corporation providing legal se Inc., on July 1, 2022. On July 31 the balance sheet showed Cash $4,000, Accounts Recen corporation providing legal services, Bindy Crawford Supplies 5500, Equipment $5,000, Accounts Payable $4,200, Common Stock $6,200, and Earnings $1.600. During August, the following transactions occurred. Aug. 1 Collected $1,100 of accounts receivable due from customers. 4 Paid $2,700 cash for accounts payable due. Performed services worth $5,400, of which $3,600 is collected in cash and the balance is due in September 15 Purchased additional office equipment for $4,000, paying $700 in cash and the balance on account. 19 Paid salaries $1,400, rent for August $700, and advertising expenses $350. 000, Accounts Receivable $2,500, ommon Stock $6,200, and Retained 23 26 Paid a cash dividend of $700. Borrowed $5,000 from American Federal Bank; the money was borrowed on a 4-month note payable. Incurred utility expenses for the month on account $380. 31 ,150 Instructions a. Prepare a tabular analysis of the August transactions beginning with July 31 balances. The column heading should be Cash + Accounts Receivable + Supplies + Equipment = Notes Payable + Accounts Payable + Common Stock + Retained Earnings + Revenues - Expenses - Dividends. Include margin explanations for any changes in Retained Earnings. b. Prepare an income statement for August, a retained earnings statement for August, and a classified balance sheet at August 31. 570 70

Answer 1

Income Stmt heads + + + + + + + + Service Revenue Bindy Crawford Inc. Assets Liabilties Stockholders Equity Accounts Notes Accounts + Common + Retained No. Cash Receivable Supplies Equipment = Payable Payable + Stock + Earnings + Revenues - Expenses - Dividends 31-Jul 4,000 2,500 500 5,000 = 4,200 + 6,200 + 1,600 + 1-Aug 1,100 (1,100) 4-Aug (2,700) (2,700) + 9-Aug 3,600 1,800 5,400 15-Aug (700) 4,000 3,300 19-Aug (1,400) (1,400) - (700) (700) - (350) (350) - 23-Aug (700) (700) 26-Aug 5,000 5,000 31-Aug 380 (380) - Totals 7,150 3,200 500 9,000 = 5,000 5,180 + 6,200 + 1,600 + 5,400 - (2,830) - (700) + + + + + + + + + Salaries expense Rent expense Advertising expense + + + + + + + + + + + + Utilities expense

5,400 Bindy Crawford Inc. Income Statement For the Month Ended August 31, 2022 Revenues Service Revenue Expenses Salaries expense Rent expense Advertising expense Utilities expense Total Expenses Net Income 1,400 700 350 380 2,830 2,570 Statement of Retained Earnings For the Month Ended August 31, 2022 Retained Earnings, August 1, 2022 Add: Net Income 1,600 2,570 4,170 (700) 3,470 Less: Dividends Retained Earnings, August 31, 2022

Bindy Crawford Inc. Balance Sheet As of August 31, 2022 Assets Current Assets Cash Accounts Receivable Supplies Total Current Assets 7,150 3,200 500 10,850 Property, Plant & Equipment Equipment Total Assets 9,000 19,850 Liabilities & Stockholders Equity Current Liabilities Notes Payable Accounts Payable Total Current Liabilities 5,000 5,180 10,180 Stockholders Equity Common Stock Retained Earnings Total Stockholders Equity Total Liabilities & Stockholders Equity 6,200 3,470 9,670 19,850