Nancy Grey opened Grey Company, a veterinary business in Neosho, Wisconsin, on August 1, 2010. On August

Question:

Nancy Grey opened Grey Company, a veterinary business in Neosho, Wisconsin, on August 1, 2010. On August 31 the balance sheet showed: Cash $9,000; Accounts Receivable $1,700; Supplies $600; Office Equipment $5,000; Accounts Payable $3,600; Common Stock $12,000; and Retained Earnings $700. During September the following transactions occurred.

1. Paid $3,400 cash for accounts payable due.

2. Received $1,600 from customers in payment of accounts receivable.

3. Purchased additional office equipment for $5,100, paying $1,000 in cash and the balance on account.

4. Earned revenue of $9,500, of which $2,300 is paid in cash and the balance is due in October.

5. Declared and paid a $600 cash dividend.

6. Paid salaries $900, rent for September $800, and advertising expense $250.

7. Incurred utility expenses for the month on account $170.

8. Received $5,000 from Hilldale Bank on a 6-month note payable.

Instructions

(a) Prepare a tabular analysis of the September transactions beginning with August 31 balances. The column headings should be: Cash + Accounts Receivable + Supplies + Office Equipment = Notes Payable + Accounts Payable + Common Stock + Retained Earnings. Include margin explanations for any changes in Retained Earnings.

(b) Prepare an income statement for September, a retained earnings statement for September, and a classified balance sheet at September 30, 2010.

Common Stock
Common stock is an equity component that represents the worth of stock owned by the shareholders of the company. The common stock represents the par value of the shares outstanding at a balance sheet date. Public companies can trade their stocks on... Accounts Payable
Accounts payable (AP) are bills to be paid as part of the normal course of business.This is a standard accounting term, one of the most common liabilities, which normally appears in the balance sheet listing of liabilities. Businesses receive... Accounts Receivable
Accounts receivables are debts owed to your company, usually from sales on credit. Accounts receivable is business asset, the sum of the money owed to you by customers who haven’t paid.The standard procedure in business-to-business sales is that... Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...