Question

6 ! Required information The general ledger of Red Storm Cleaners at January 1, 2021, includes the following account balances: Part 5 of 8 Credits 0.63 points Debits $13,000 6,600 2,600 17,000 Accounts Cash Accounts Receivable Supplies Equipment Accumulated Depreciation Salaries Payable Common Stock Retained Earnings Totals eBook $ 5,800 8,300 18,000 7,100 $39,200 Print $39,200 References The following is a summary of the transactions for the year: 1. March 12 Provide services to customers, $46,000, of which $19,600 is on account. 2. May 2 Collect on accounts receivable, $16,600. 3. June 30 Issue shares of common stock in exchange for $4,000 cash. 4. August 1 Paysalaries of $8,300 from 2020 (prior year). 5. September 25 Pay repairs and maintenance expenses, $11,600. 6. October 19 Purchase equipment for $6,600 cash. 7. December 30 Pay $1,200 cash dividends to stockholders.

Answer 1

Answer:

Requirement 8a Income Statement RED STORM CLEANERS Income Statement For the Year Ended December 31, 2021 Service Revenue $ 46,000 Expenses: Repair and Maintaince Expenses $ 11,600 Total Expenses Net Income $ 11,600 $ 34,400

Requirement 8a Classified balance sheet: Assets Current Assets Cash($13,000 + $19,300) Accounts Receivable($6,600 + $3000) Supplies RED STORM CLEANERS Balance Sheet December 31, 2021 Liabilities Current Liabilities $ 32,300 $ 9,600 $ 2,600 $ Total Current Assets Long term assets Equipment($17,000 + $6,600) Less: Accumulated Depreciation 44,500 Stockholders' Equity Common Stock ($18,000 + $4,000) 23,600 Retained Earnings ($7,100 + $34,400 - $1200) (5,800) $ 22,000 $ 40,300 $ $ Total Stockholders' Equity 62,300 Total Liabilities and Stockholders' Equity Total Assets $ $ 62,300

Note 1: Effect of transactions during the year on account balances: Assets Liabilities Date Cash Accounts Receivables Equipment Salaries payable Stockholders Equity Repair and Common Stock Service Revenue Maintaince Expenses $ 46,000 Dividend 19,600 (16,600) S 4,000 $ (8,300) Mar 12 May 2 June 30 Aug 1 Sep 25 Oct 19 Dec 30 Net Increase/(Decrease) $ $ $ $ $ $ $ $ 26,400 $ 16,600 $ 4,000 (8,300) (11,600) (6,600) (1,200) 19,300 $ $ (11,600) $ 6,600 (1,200) (1,200) 3,000 $ 6,600 $ (8,300)| $ 4,000 $ 46,000 $ (11,600) $