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Accounting (Text Only)

26th Edition
Carl Warren + 2 others
ISBN: 9781285743615

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BuyFindarrow_forward

Accounting (Text Only)

26th Edition
Carl Warren + 2 others
ISBN: 9781285743615
Textbook Problem
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Financial statements

Seth Feye established Reliance Financial Services on July 1, 2016. Reliance Financial Services offers financial planning advice to its clients. The effect of each transaction and the balances after each transaction for July follow:

Chapter 1, Problem 1.3APR, Financial statements Seth Feye established Reliance Financial Services on July 1, 2016. Reliance

Instructions

  1. 1. Prepare an income statement for the month ended July 31, 2016.
  2. 2. Prepare a statement of owner’s equity for the month ended July 31, 2016.
  3. 3. Prepare a balance sheet as of July 31, 2016.
  4. 4. (Optional) Prepare a statement of cash flows for the month ending July 31, 2016.

1)

To determine

Financial statements:

Financial statements refer to those statements, which are prepared by the Company according to particular formats in accounting to show its financial position.

Financial statements include the following statements:

Income statement:

Income statement is a financial statement that shows the net income or net loss by deducting the expenses from the revenues and vice versa.

Statement of owner's’ equity:

The statement of owner's equity reports the changes in the owner's equity for a period of time.

Balance Sheet:

Balance Sheet summarizes the assets, the liabilities, and the Shareholder’s equity of a company at a given date. It is also known as the statement of financial status of the business.

Statement of cash flows:

This statement reports all the cash transactions which are responsible for inflow and outflow of cash, and result of these transactions is reported as ending balance of cash at the end of reported period.

To Prepare: The income statement of RF Services for the month ended July 31, 2016.

Explanation

Prepare the income statement of RF Services for the month ended July 31, 2016.

RF Services
Income Statement
For the month ended July 31, 2016
Particulars Amount ($) Amount ($)
Revenues
Fees Earned $144,500
Expenses
 �...

2)

To determine

To Prepare: The statement of Owner's equity for RF Services for the month ended July 31, 2016.

3)

To determine

To Prepare: The balance sheet of RF Services for the month ended July 31, 2016.

4)

To determine

To Prepare: The statement of cash flows for RF Services for the month ended July 31, 2016.

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