Question

6. Use the following accounts and information to prepare, in good form, an income statement and a retained earnings statement for the month of August and a balance sheet at August 31, 2014 for Pierce Industries. Accounts payable Accounts receivable Buildings Cash Service revenue Common stock $ 1,100 5,400 63,000 18,600 25,700 52,000 Dividends Insurance expense Supplies Notes payable Rent expense Salaries and wages expense $3,000 1,200 1,400 3,300 3,400 12,000 25,900 Retained earnings (beginning) END

Answer 1

c

PIERCE INDUSTRIES
Income Statement
For the Month Ended August 31, 2014
Revenue
	Service Revenue	$               25,700
Total Revenue			$                                                   25,700
Expenses
	Insurance expense	$                 1,200
	Rent expense	$                 3,400
	Salaries and wages expense	$               12,000
Total Expenses			$                                                   16,600
Net Income			$                                                    9,100

Statement of Retained Earnings
For the Month Ended August 31, 2014
Retained Earnings, Aug 1		$          25,900
Add	Net Income for the year	$            9,100
		$          35,000
Less	Dividends	$            3,000
Retained Earnings, Aug 31		$          32,000

PIERCE INDUSTRIES
Balance Sheet
August 31, 2014
Assets		Liabilities:
Cash	$               18,600	Accounts payable	$       1,100
Accounts receivable	$                 5,400	Notes Payable	$       3,300
Supplies	$                 1,400	Total Liabilities	$       4,400
Buildings	$               63,000	Stockholders' Equity
		Common Stock	$      52,000
		Retained Earnings	$      32,000
		Total Stockholders' Equity	$      84,000
Total Assets	$          88,400	Total Liabilities and Stockholders Equity	$ 88,400

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