Question

Use the data below. What is net income for October? What is the month ending value for assets?What is the month ending value for stockholders' equity?

Flint Corporation provides security services. Selected transactions for Flint Corporation are presented below.

Oct. 1 Issued common stock in exchange for $75,200 cash from investors. 4 Paid 1 month of rent for building for $2,300. 7 Purchased equipment for $20,500, paying $4,600 cash and the balance on account. 8 Paid $600 for advertising. 10 Received bill for equipment repair cost of $440. 12 Provided security services for event for $20,000 on account. 16 Purchased supplies for $470 on account. 21 Paid balance due from October 7 purchase of equipment. 24 Received and paid utility bill for $169. 27 Received payment from customer for October 12 services performed. 31 Paid employee salaries and wages of $5,800

Answer 1

i.Net income:

Income Statement
Service revenue		$20,000
Less:Expenses:
Rent expense	$2,300
Advertising expense	$600
Repair expense	$440
Utilities expense	$169
Salaries and wages expense	$5,800
Total expenses		$9,309
Net income		$10,691

ii. Total Assets:

Assets
Cash*	$65,831
Supplies	$470
Equipment	$20,500
Total Assets	$86,801

Calculations:

*T-Account for cash

Cash
$75,200	$2,300
$20,000	$4,600
	$600
	$15,900
	$169
	$5,800
$65,831

iii.Stockholder's equity:

Stockholders' equity:
Common stock	$75,200
Retained earnings	$10,691
Total stockholders' equity	$85,891