Question

On August 31, 2017, the statement of financial position of Donahue Veterinary Clinic showed Cash £11,276, Accounts Receivable £4,676, Supplies £600, Equipment £6,000, Accounts Payable £6,576, Share Capital—Ordinary £15,116, and Retained Earnings £860. During September, the following transactions occurred.

1.		Paid £3,685 cash for accounts payable due.
2.		Collected £2,257 of accounts receivable.
3.		Purchased additional equipment for £2,128, paying £850 in cash and the balance on account.
4.		Recognized revenue of £8,301, of which £2,743 is collected in cash and the balance is due in October.
5.		Declared and paid a £2,360 cash dividend
6.		Paid salaries £2,633, rent for September £1,184, and advertising expense £153.
7.		Incurred utilities expense for month on account £291.
8.		Received £14,277 from Capital Bank on a 6-month note payable.

Prepare a tabular analysis of the September transactions beginning with August 31 balances. (If an amount reduces the account balance then enter with a negative sign preceding the number e.g. -15,000 or parenthesis (15,000).)

Prepare an income statement for September.

Prepare a retained earnings statement for September. (List items that increase retained earnings first.)

Prepare a statement of financial position at September 30.

Answer 1

Requiremnt 1: A Transaction Donahue veterinary Clinic Balance Sheet Liabilities Income Statement Expense Assets + Stockholders' Equity Revenue Net Income Accounts Note Payable Payable £ 6,576 -£ 3,685 Common Retained Stock Earnings £ 15,116 E 860 + 1 1 1 1 + £ 1,278 + + = E 8,301 Accounts Cash Receivable Supplies Equipment Aug. 31 balance € 11,276 E 4,676 E 600 E 6,000 1 - 3,685 2 £ 2,257 - 2,257 3-€ 850 £ 2,128 41 £ 2,743 £ 5,558 5-E 2,360 6a. - £ 2,633 6b. - 1,184 6c.-E 153 7 8 E 14,277 Ending Balances £ 19,688 £ 7,977 £ 600 £ 8,128 + + + + + + + + + + + + + + ... £ 8,301 E 8,301 - £ 2,360 -£ 2,633 - £ 1,184 - £ 153 -E 291 + £ 2,633 £ 1,184 £ 153 £ 291 -E -E - -E 2,633 1,184 153 291 £ 291 £ 14,277 £4,460 £14,277 = = £15,116 £2,540 £8,301 £4,261 £ 4,040 Requiremnt 2: B Donahue veterinary Clinic Income Statement £ 8,301 For the Month Ended September Revenue Less Expenses: Salaries expense 2,633 Rent expense £ 1,184 Advertising expense £ 153 Utilities expense E 291 Total expense Net income £ 4,261 £4,040 Requiremnt 3: с Donahue veterinary Clinic Statement of Retained Earnings For the Month Ended September Balance, August 31 E 860 Add: Net income £ 4,040 E 4,900 Less: Dividends E 2,360 Balance, September 30 £ 2,540 Requiremnt 4: D Donahue veterinary Clinic Balance Sheet Sep-30 8,128 Assets Cash £ 19,688 Accounts receivable E 7,977 Supplies £ 600 Equipment £ Total assets £ 36,393 Liabilities and Stockholders' Equity Notes payable £ 14,277 Accounts payable E 4,460 Total liabilities £ 18,737 Common stock £ 15,116 Retained earnings E 2,540 Total stockholders' equity £ 17,656 Total liabilities and stockholders' equity £ 36,393 * Kindly Comment down for any clarifications/ queries and please upvote.