Robin Klann created a corporation providing legal services, Robin Klann Inc., on July 1, 2012. On July
Question:
Robin Klann created a corporation providing legal services, Robin Klann Inc., on July 1, 2012. On July 31 the balance sheet showed: Cash $4,000; Accounts Receivable $2,500; Supplies $500; Equipment $5,000; Accounts Payable $4,200; Common Stock $6,200; and Retained Earnings $1,600. During August the following transactions occurred.
Aug. 1 Collected $1,100 of accounts receivable due from customers.
4 Paid $2,700 cash for accounts payable due.
9 Earned revenue of $5,400, of which $3,600 is collected in cash and the balance is due in September.
15 Purchased additional office equipment for $4,000, paying $700 in cash and the balance on account.
19 Paid salaries $1,400, rent for August $700, and advertising expenses $350.
23 Paid a cash dividend of $700.
26 Received $5,000 from Standard Federal Bank; the money was borrowed on a 4-month note payable.
31 Incurred utility expenses for the month on account $380.
Instructions
(a) Prepare a tabular analysis of the August transactions beginning with July 31 balances.
The column heading should be: Cash + Accounts Receivable + Supplies + Equipment = Notes Payable + Accounts Payable + Common Stock + Retained Earnings + Revenues − Expenses − Dividends. Include margin explanations for any changes in Retained Earnings.
(b) Prepare an income statement for August, a retained earnings statement for August, and a classified balance sheet at August 31.
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... Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may... Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...
Step by Step Answer:
a b ROBIN KLANN INC Income Statement For the Month Ended August 31 2012 Revenues Service revenue 5400 Expenses Salaries and wages expense 1400 Rent ex...View the full answer
Financial Accounting Tools for business decision making
ISBN: 978-0470534779
6th Edition
Authors: Paul D. Kimmel, Jerry J. Weygandt, Donald E. Kieso
