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 John Hilton, CPA, P.C.:

Requirements

1. Income statement for the month ended April 30, 2012.
2. Statement of retained earnings for the month ended April 30, 2012. The beginning balance of retained earnings was $0.
3. Balance sheet at April 30, 2012.

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

The trial balance of John Hilton, CPA, P.C., is dated March 31, 2012:

During April, Hilton or his business completed the following transactions:

Apr 4	Collected $7,000 cash from a client on account.
8	Performed tax services for a client on account, $5,000.
13	Paid business debt on account,$2,500.
18	Purchased office supplies on account, $600.
20	Paid cash dividends of $2,300.
21	Hilton paid for a deck for his private residence, using personal funds, $12,000.
22	Received $2,100 cash for consulting work just completed.
27	Paid office rent, $300.
28	Paid employee salary, $1,300.

Requirements

1. Record the April transactions in the 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. Open the ledger accounts listed in the trial balance, together with their balances at March 31.
3. Prepare the trial balance of John Hilton, CPA, P.C., at April 30, 2012.