Question

Problem 1-03A a1-a3 On June 1, 2022, Sandhill Co. was started with an initial investment in the ocompany of $25,500 cash. Here are the assets, labilities, 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: $14,000 $5,600 Notes payable Cash 640 4,140 Accounts payable Accounts receivable 1,520 8,500 Service revenue Supplies expense 620 2,456 Maintenance and repairs expense Supplies 280 400 Utilities expense Advertising expense 30,800 1,600 Salaries and wages expense Equipment 25,500 Common stock During June, the company issued no additional stock but paid dividends of $1,224.

Answer 1

Ans. 1	SANDHILL CO.
	Income Statement
	For the Month Ended June 30, 2022
	Particulars	Amount	Amount
	Revenues:
	Service revenue	$8,500
	Total revenue (a)		$8,500
	Less: Expenses:
	Advertising expense	$400
	Supplies expense	$1,520
	Maintenance and repairs expense	$620
	Utilities expense	$280
	Salaries and wages expense	$1,600
	Total expenses (b)		$4,420
	Net Income (a - b)		$4,080
	*Net income is the excess of total revenues on expenses.
Ans. 2	SANDHILL CO.
	Retained Earnings Statement
	For the Month Ended June 30, 2022
	Particulars		Amount
	Beginning balance of Retained earnings		$0
	Add: Net income		$4,080
	Less: Dividends		-$1,224
	Ending balance of Retained earnings		$2,856
	*Net Income is added and dividends are subtracted from beginning balance of retained earnings.
Ans. 3	SANDHILL CO.
	Balance Sheet
	For the Month Ended June 30, 2022
	Assets:
	Cash		$5,600
	Accounts receivables		$4,140
	Supplies		$2,456
	Equipment		30800
	Total Assets		$42,996
	Liabilities and Stockholder's Equity:
	Current Liabilities:
	Accounts payable	$640
	Notes payable	$14,000
	Total Liabilities		$14,640
	Stockholder's equity:
	Common stock	$25,500
	Retained earnings	$2,856
	Total Stockholder's Equity		$28,356
	Total Liabilities and Stockholder's Equity		$42,996