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Chapter 1: Q20E (page 37)
Compute the missing amount in the accounting equation for each entity from the financial information presented:
Assets Liabilities Equity
Hair Styles \( ? \) 36,000 $ 36,000
Style Cuts 90,000 ? 48,000
Your Basket 101,000 68,000 ?
Assets equals: $72,000
Liabilities: $42,000
Equity: $33,000
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Allen Shonton recently opened his own accounting firm on April 1, which he operates as a corporation. The name of the new entity is Allen Shonton, CPA. Shonton experienced the following events during the organizing phase of the new business and its first month of operations in 2018: Apr. 5 Shonton deposited \(75,000 in a new business bank account titled Allen Shonton, CPA. The business issued common stock to Shonton. 6 Paid \)300 cash for letterhead stationery for new office. 7 Purchased office furniture for the office on account, \(9,500. 10 Consulted with tax client and received \)4,000 for services rendered. 11 Paid utilities, \(190. 12 Finished tax hearings on behalf of a client and submitted a bill for accounting services, \)20,000. 18 Paid office rent, \(750. 25 Received amount due from client that was billed on April 12. 27 Paid full amount of accounts payable created on April 7. 30 Cash dividends of \)3,500 were paid to stockholders. Requirements: Prepare the following financial statements: b. Statement of retained earnings.
Wizco Advertising鈥檚 balance sheet data at May 31, 2018, and June 30, 2018, follow:
May 31, 2018 June 30, 2018
Total Assets \( 122,000 \) 287,000
Total Liabilities 66,000 144,000
For each of the following situations that occurred in June, 2018 with regard to
common stock and dividends of a corporation, compute the amount of net income or
net loss during June 2018.
a. The company issued \(10,000 of common stock and paid no dividends.
b. The company issued no common stock. It paid cash dividends of \)3,000.
c. The company issued \(12,500 of common stock and paid cash dividends of
\)30,000.
Question: The bookkeeper of Juniper Landscaping prepared the company鈥檚 balance sheet while the accountant was ill. The balance sheet, shown on the next page, contains numerous errors. In particular, the bookkeeper knew that the balance sheet should balance, so he plugged in the retained earnings amount needed to achieve this balance. The retained earnings is incorrect. All other amounts are correct, but some are out of place or should not be included on this statement. Prepare a corrected balance sheet. JUNIPER LANDSCAPING Balance Sheet Month Ended July 31, 2018 Accounts Receivable Dividends Service Revenue Office Supplies Salaries Expense Property Tax Expense Accounts Payable Retained Earnings Total Liabilities Common Stock Office Furniture Notes Payable Rent Expense Total Assets Assets Liabilities Stockholders鈥� Equity \( 5,300 \) 75,100 800 34,500 3,200 6,300 24,700 300 \( 1,800 14,000 38,000 \) 75,100 3,300 2,700 5,300 10,000 J
Using the information provided, analyze the effects of Lawlor Lawn Service鈥檚 transactions on the accounting equation. May 1 Received \(1,700 and issued common stock. May 3 Purchased a mower on account, \)1,440. May 5 Performed lawn services for client on account, \(200. May 17 Paid \)60 cash for gas used in mower. May 28 Paid cash dividends of $300.
Polk Street Homes had the following cash transactions for the month ended July 31, 2018.
Cash receipts:
Collections from customers $ 25,000
Issued common stock 13,000
Cash payments:
Rent 500
Utilities 2,000
Salaries 1,500
Purchase of equipment 25,000
Payment of cash dividends 4,000
Cash balance, July 1, 2018 14,000
Cash balance, July 31, 2018 19,000
Prepare the statement of cash flows for Polk Street Homes for the month ended
July 31, 2018.
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