acct 201 test 1

2715 Words Apr 25th, 2015 11 Pages
On October 1, Keisha King organized Real Answers, a new consulting firm; on October 3, the owner contributed $84,000 cash. On October 31, the company’s records show the following items and amounts.

Cash
$
11,360 Cash dividends
$
2,000 Accounts receivable 14,000 Consulting fees earned 14,000 Office supplies 3,250 Rent expense 3,550 Land 46,000 Salaries expense 7,000 Office equipment 18,000 Telephone expense 760 Accounts payable 8,500 Miscellaneous expenses 580 Common stock 84,000

Also assume the following: a.
The owner’s initial investment consists of $38,000 cash and $46,000 in land in exchange for its common stock.
b.
The company’s $18,000
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On August 31, the company’s records show the following accounts and amounts for the month of August. Use this information to prepare an August income statement for the business.

Cash
$
25,360
Dividends
$
6,000
Accounts receivable 22,360
Consulting fees earned 27,000 Office supplies 5,250
Rent expense 9,550 Land 44,000
Salaries expense 5,600 Office equipment 20,000
Telephone expense 860 Accounts payable 10,500
Miscellaneous expense 520 Common stock 102,000

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Income Statement
For Month Ended August 31
Revenues:
Consulting fees earned
$27,000

0

Total Revenues
$27,000
Expenses:
Rent expense
$9,550

Salaries expense
5,600

Telephone expense
860

Miscellaneous expenses
520

0

0

Total expenses
16,530
Net income
$10,470

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Statement of Retained Earnings
For Month Ended August 31
Retained earnings, July 31
$0
Add: Net income
10,470

10,470
Less: Dividends
(6,000)
Retained earnings, August 31
$4,470

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Balance Sheet
As of August 31
Assets:
Liabilities:
Cash
$25,360
Accounts payable
$10,500
Accounts receivable
22,360

0
Office supplies
5,250
Equity:
Land
44,000
Common stock
102,000
Office equipment
20,000
Retained earnings
4,470
Total assets
$116,970
Total liabilities and equity
$116,970

Identify the financial statement(s) where each of the following items appears. Use I for income statement, E for statement of retained earnings, and B for balance sheet.

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