Question

Exercise 1-15A Preparing an income statement and a balance sheet LO 1-7 Majka Company was started on January 1 Year 1 During Year 1, the company experienced the following three accounting events (1) earned cash revenues of $29.500.(2) paid cash expenses of $13,500, and (3) paid a $1.800 cash dividend to its stockholders. These were the only events that affected the company during Year 1 Required a. Record the effects of each accounting event under the appropriate general ledger account headings b. Prepare an income statement statement of changes in stockholders' equity, and a balance sheet dated December 31 Yeart for Majka Company Complete this question by entering your answers in the tabs below.

Answer 1

Note: In the given question Common Stock was not given, So we are considering it as Nil.

(a)

MAJKA COMPANY
Accounting Equation for Year1
Event	Assets	=	Liabilities	+	Stockholder's Equity
	Cash	=		+	Common Stock	Retained Earnings
1	$29,500	=	-	+	-	$29,500
2	($13,500)	=	-	+	-	($13,500)
3	($1,800)	=	-	+	-	($1,800)
Ending Balance	$14,200	=	-	+	-	$14,200

(b)

MAJKA COMPANY
Income Statement
For the year Ended December 31, Year1
Cash Revenue	$29,500
Less: Cash expenses	($13,500)
Net Income	$16,000

MAJKA COMPANY
Statement of changes in Stockholder's Equity
For the year Ended December 31, Year1
Beginning Common Stock	-
	-
Ending Common Stock		-
Beginning Retained Earnings	-
Add: Net income during Year 1	$16,000
Less: Cash dividend to stockholders	($1,800)
Ending Retained Earnings		$14,200
Total Stockholder's Equity		$14,200

MAJKA COMPANY
Balance Sheet
As on December 31, Year 1
Assets
Cash		$14,200
Total Assets		$14,200
Liabilities		-
Stockholder's equity
Common Stock	-
Retained Earnings	$14,200
Total Stockholder's Equity		$14,200
Total Liabilities and Stockholder's Equity		$14,200