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ACC/300 Problem Set 1

Problem set focusing on financial accounting principles, journal entries, and balance sheets.

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    Problem Set 1 ACC/300 (Chapter 1 - P1 - 3A) On June 1, Beardsley Service Co. was established by using the primary investment in the corporation amounting to $22,100 cash. The assets and liabilities of the company last June 30 is listed and the revenues and expenses for the month of June, the first month of their enterprise. Cash $ 4,600 Notes payable $12,000 Accounts receivable 4,000 Accounts payable 500 Service revenue 7,500 Supplies expense 1,000 Supplies 2,400 Maintenance and repairs expense 600 Advertising expense 400 Utilities expense 300 Equipment 26,000 Salaries and wages expense 1,400 The corporation did not order any more stocks yet still paid dividends amounting $1,400. Create a retained earnings statement, income statement and a balance sheet; explain the results. (SO 4, 5), AP Instructions a. For the month of June, create a retained earnings statement and an income statement; also prepare a balance sheet at June 30, 2012. b. Precisely deliberate if the corporation’s first month on the industry is a triumph. c. Explain the corporation’s choice to allocate a dividend.

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    Marginal check figures (in blue) provide a key number to let you know you are on the right track. (a) Net income $3,800 Ret. earnings $2,400 Tot. assets $37,000 A) Income Statement for the month of June 30 th , 2012 Particulars Details $ Amount $ Service Revenue (A) 7,500 Less Expenses Supplies Expense 1,000 Repairs and Maintenance Expense 600 Advertising Expense 400 Utilities Expense 300 Salaries and wages Expense 1,400 Total Expenses (B) (3,700) Net Income (A - B) 3,800 Statement of Retained Earnings for the month of June Particulars Details $ Net Income 3,800 Less Dividend (1,400) Retained Earnings 2,400 Balance sheet for the month of June Liabilities Amount $ Assets Amount $ Capital (22100+2400) (+) retained Earnings 24,500 Cash 4,600 Notes Payable 12,000 Accounts receivable 4,000 Accounts payable 500 Supplies 2,400 Equipment 26,000 Total 37,000 Total 37,000

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