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 Vince Smith, Attorney, 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]
Vince Smith opened a law office on April 2, 2012. During the first month of operations, the business completed the following transactions:
Apr 2 | Smith deposited $32,000 cash in the business bank account Vince Smith, Attorney, P.C. and the business gave Smith common stock. |
3 | Purchased supplies, $500, and furniture, $2,000, on account. |
4 | Performed legal service for a client and received cash, $1,900. |
7 | Paid cash to acquire land for a future office site, $24,000. |
11 | Prepared legal documents for a client on account, $1,100. |
15 | Paid secretary’s bi-monthly salary, $460. |
16 | Paid for the supplies purchased April 3 on account. |
18 | Received $1,700 cash for helping a client sell real estate. |
19 | Defended a client in court and billed the client for $700. |
29 | Received cash on account, $800. |
30 | Paid secretary’s bi-monthly salary, $460. |
30 | Paid rent expense, $730. |
30 | Paid cash dividend of $2,700. |
Requirements
1. Open the following T-accounts: Cash, Accounts receivable, Supplies, Furniture; Land, Accounts payable, Common stock, Dividends, Service revenue, Salary expense, and Rent expense.
2. Record each transaction in the journal, using the account titles given. Key each transaction by date. Explanations are not required.
3. Post the transactions to T-accounts, using transaction dates as posting references in the ledger. Label the balance of each account Bal, as shown in the chapter.
4. Prepare the trial balance of Vince Smith, Attorney, P.C., at April 30, 2012.
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