Problem

Preparing financial statements from the trial balance [20-30 min]Link Back to Chapter 1 (I...

Preparing financial statements from the trial balance [20-30 min]

Link Back to Chapter 1 (Income Statement, Statement of Retained Earnings, Balance Sheet). Refer to Problem After completing the trial balance in Problem prepare the following financial statements for Sharon Silver, Registered Dietician, P.C.:

Requirements

1. Income statement for the month ended July 31, 2012.
2. Statement of retained earnings for the month ended July 31, 2012. The beginning balance of retained earnings was $0.
3. Balance sheet at July 31, 2012.

Journalizing transactions, posting to accounts in four-column format, and preparing a trial balance [45-60 min]

The trial balance of Sharon Silver, Registered Dietician, P.C., at Tune 30, 2012, follows.

During July, Silver or her business completed the following transactions:

Jul 4	Collected $6,000 cash from a client on account.
7	Performed a nutritional analysis for a hospital on account, $6,600.
12	Silver used personal funds to pay for the renovation of her private residence, $55,000.
16	Purchased supplies on account, $1,000.
19	Paid cash dividends of $2,300.
20	Paid business debt on account, $2,500.
24	Received $2,200 cash for consulting with Natural Foods.
25	Paid rent, $500.
31	Paid employee salary, $1,700.

Requirements

1. Record the July transactions in the business’s journal. Include an explanation for each entry.
2. Post the transactions to four-column accounts in the ledger, using dates, account numbers, journal references, and posting references.
3. Prepare the trial balance of Sharon Silver, Registered Dietician, P.C., at July 31, 2012.