Financial Accounting, Student Value Edition (5th Edition)
5th Edition
ISBN: 9780134728520
Author: Robert Kemp, Jeffrey Waybright
Publisher: PEARSON
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Textbook Question
Chapter 1, Problem 21AE
Types of accounts and income statement preparation (Learning Objectives 5 & 6) 15-20 min.
Selected accounts of Annis Consulting, Inc., a financial services business, have the following balances at December 31, 2018, the end of its first year of operations. During the year, Laura Annis, the only stockholder, bought $27,000 of stock in the business.
| Office Furniture................ | $ 21,000 | Rent Expense...................... | $40,000 |
| Utilities Expense.............. | 13,500 | Cash.................................. | 5,400 |
| Accounts Payable............. | 5,200 | Office Supplies................... | 1,500 |
| Note Payable..................... | 20,000 | Salaries Expense.................. | 41,000 |
| Service Revenue................ | 141,500 | Salaries Payable................... | 2,000 |
| Accounts Receivable......... | 4,500 | Property Tax Expense......... | 2,000 |
| Supplies Expense.............. | 3,800 | Equipment.......................... | 34,000 |
Requirements
- 1. Identify each amount shown as an asset, liability, revenue, or expense.
- 2. Prepare the income statement of Annis Consulting, Inc., for the year ended December 31, 2018. What is the result of operations for 2018?
- 3. Assuming the balance in
Retained Earnings on December 31, 2018, was $36,200, what was the amount of the dividends during the year? Answer by preparing a statement of retained earnings to solve for the dividends. Recall that the business has just completed its first year and has no beginning balance for retained earnings.
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Chapter 1 Solutions
Financial Accounting, Student Value Edition (5th Edition)
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