Preparing 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 Beth Yung, Designer, P.C.:
Requirements
1. Income statement for the month ended November 30, 2012.
2. Statement of retained earnings for the month ended November 30, 2012. The beginning balance of retained earnings was $0.
3. Balance sheet at November 30, 2012.
Journalizing transactions, posting to T-accounts, and preparing a trial balance [45-60 min]
Beth Yung started her practice as a design consultant on November 1, 2012. During the first month of operations, the business completed the following transactions:
Nov1 | Received $34,000 cash and issued common stock. |
4 | Purchased supplies, $500, and furniture, $1,900, on account. |
6 | Performed services for a law firm and received $1,200 cash. |
7 | Paid $25,000 cash to acquire land for a future office site. |
10 | Performed service for a hotel and received its promise to pay the $1,200 within one week. |
14 | Paid for the furniture purchased November 4 on account. |
15 | Paid secretary’s bi-monthly salary, $540. |
17 | Received cash on account, $500. |
20 | Prepared a design for a school on account, $800. |
28 | Received $2,200 cash for consulting with Plummer&Gorden. |
30 | Paid secretary’s bi-monthly salary, $540. |
30 | Paid rent expense, $830. |
30 | Paid cash dividends 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 the T-accounts, using transaction dates as posting references in the ledger accounts. Label the balance of each account Bal, as shown in the chapter.
4. Prepare the trial balance of Beth Yung, Designer, P.C., at November 30, 2012.
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