Question

Required information [The following information applies to the questions displayed below) Liu Zhang operates Lawson Consulting, which began operations on June 1. The Retained Earnings account balance at June 1 was $0 and the owner invested $14,540 cash in the company on June 1. On June 30, the company's records show the following accounts and amounts for the month of June. Cash Accounts receivable Equipment Accounts payable Common stock $ 7,000 4,900 6,900 3,360 14,540 Dividends Service revenue Rent expense Wages expense $1,900 13,200 2,400 8,000 Use the above information to prepare a June 30 balance sheet for Lawson Consulting. LAWSON CONSULTING Balance Sheet 0 Total equity 0 $ $ 0

Answer 1

Correct Answer:

Lawson Consulting
Balance sheet
for the month ending June 30
Assets	Amount	Liabilities and stockholder's equity	Amount
Cash	$               7,000	Accounts payable	$         3,360
Account receivable	$               4,900	Total Liabilities	$         3,360
Equipment	$               6,900
		Common stock	$       14,540
		Retained earnings	$             900
Total assets	$             18,800	Total Liabilities and Stockholder's equity	$       18,800

Working:

income statement
service revenue	$      13,200.00
Less: Expense
rent expenses	$        2,400.00
wages expenses	$        8,000.00
Total expenses	$      10,400.00
Net income	$        2,800.00

Lawson Consulting
Statement of Retained earning
beginning balance retained earning		$                -
Add: Net income		$         2,800
Total		$         2,800
Less: Dividends		$       (1,900)
Ending balance Retained earnings		$             900

Lawson Consulting
Balance sheet
for the month ending June 30
Assets		Liabilities and stockholder's equity
Cash	$               7,000	Accounts payable	$         3,360
Account receivable	$               4,900	Total Liabilities	$         3,360
Equipment	$              6,900
		Common stock	$       14,540
		Retained earnings	$             900
Total assets	$             18,800	Total Liabilities and Stockholder's equity	$       18,800

End of Answer.

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