Question

XYZ Company has the following General Ledger accounts and their balances. This is the first month operations for XYZ Company. January 31, xxx1
Account Description	Balance
Accounts Payable	$ 1,920
Capital Stock	$ 48,000
Cash	$ 5,600
Dividends	$ 7,200
Land	$ 50,000
Miscellaneous Expense	$ 1,320
Rent Expense	$ 7,640
Revenues	$ 36,000
Salaries and Wages Expense	$ 12,000
Utilities Expense	$ 2,160
Actions to take:
Prepare the Balance Sheet (including heading)
Prepare the Income Statement (including heading)
Prepare the Statement of Change in Stockholder’s Equity (including heading)

Answer 1

Solution:

Requirement 1: Balance Sheet

XYZ Company
Balance sheet
For month ended January 31, xxx1
Assets
Current assets:
Cash	$          5,600
Total Current Assets		$            5,600
Property,plant, and equipment:
Land		$          50,000
Total Assets		$          55,600
Liabilities and stockholder's Equity
Current liabilities:
Accounts Payable	$          1,920
Total Liabilities		$            1,920
Owner`s Equity:
Capital Stock	$        48,000
Retained Earnings ( Note:1)	$          5,680
Total Owner`s Equity		$          53,680
Total liabilities and stockholder's equity		$          55,600

Requirement 2:Income Statement

XYZ Company
Income statement
For month ended January 31, xxx1
Revenue
Service / Sale Revenue		$     36,000
Total Revenue (A)		$     36,000
Operating Expenses / Expenses
Rent Expense	$                    7,640
Miscellaneous Expense	$                    1,320
Salaries and Wages Expense	$                  12,000
Utility Expense	$                    2,160
Total Operating Expense (B)		$     23,120
Net Income (A-B)		$     12,880

Requirement 3: Statement of Change in Stockholder’s Equity

XYZ Company
Statement of Changes in Stockholders` Equity
For month ended January 31, xxx1
	Capital Stock	Retained Earnings	Total Stockholders` Equity
Beginning Balance	$                48,000	$                              -	$                                     48,000
Addition:	$                         -		$                                               -
Net income	$                         -	$                    12,880	$                                     12,880
Dividends	$                         -	$                    (7,200)	$                                     (7,200)
Ending Balance	$                48,000	$                       5,680	$                                     53,680