Question

Problem 2-7A Preparing an income statement, statement of retained earnings, and balance sheet. LO РЗ Angela Lopez owns and manages a consulting firm called Metrix, which began operations on March 1. On March 31, Metrix shows the following selected accounts and amounts for the month of March. polnts $ 1,900 $ 6,000 Office supplies Rental revenue Equipment Salaries expense Consulting revenue Cash Utilities expense eBook 3,400 14,000 8,800 900 Advertising expense Prepaid insurance Accounts payable 480 1,400 2,580 2,900 2,400 280 Ask Note payable Accounts receivable Common stock 2,800 3,900 Note receivable Rent expense Unearned revenue 13,200 380 Dividends 2,400 References Required: 1. Prepare a March income statement for the business. 2. Prepare a March statement of retained earnings. The Retained Earnings account balance at March 1 was $0. 3. Prepare a March 31 balance sheet. Hint: Use the Retained Earnings account balance calculated in part 2.

Answer 1

Income Statement $ $ 14,000 900 $ 14,900 Less Revenue Consulting Revenue Rental Revenue Total Revenue Expenses: Salaries Expense Utilities Expense Advertising Expense Rent Expense Total Expense Net Income $ $ $ $ 3,400 280 480 2,400 $ $ 6,560 8,340 Retained Earning Statement Retained earning Beginning Balance Net Income Add S 8,340 8,340 2,400 5,940 Less $ $ $ Dividend Retained earning Ending Balance Balance sheet For the year ended on March 31 Assets Cash Accounts Receivables Office Supplies Prepaid Insurance Notes Receivables Equipment $ $ $ $ $ $ 8,800 3,900 1,900 1,400 2,900 6,000 Total assets $ 24,900 Liabilities & Stockholder's Equity Liabilities Note Payable $ Accounts Payable $ Unearned Revenue $ Total Liabilities 2,800 2,580 380 $ 5,760 Stockholders Equity Common Stock Retained Earning Total Stockholders Equity $ $ 13,200 5,940 Add $ 19,140 Total Liabilities & Stockholder's Equity $ 24.900