The completed worksheet for Montoya Corporation as of December 31, 20X1, after the company had completed the first month of operations, appears below.

INSTRUCTIONS

1. Prepare an income statement.

2. Prepare a statement of owner’s equity. The owner made no additional investments during the month.

3. Prepare a balance sheet (use the report form).

Analyze: 

If the adjustment to Prepaid Advertising had been $3,400 instead of $1,700, what net income would have resulted?

Transcribed Image Text:

1 Cash Accounts Receivable 3 Supplies 4 Prepaid Advertising 5 Equipment 6 Accumulated Depreciation-Equipment Accounts Payable 7 8 Regina Montoya, Capital 9 Regina Montoya, Drawing Fees Income 2 10 11 Supplies Expense 12 Advertising Expense 13 Depreciation Expense-Equipment 14 15 16 17 ACCOUNT NAME 18 19 Salaries Expense Utilities Expense Totals Net Income TRIAL BALANCE DEBIT 39 1 0 0 00 6 500 00 6 050 00 10 2 0 0 00 42 500 00 4 1 0 0 00 890000 1 400 00 118 750 00 CREDIT 6500 00 54 500 00 57 750 00 118 750 00 (a) (b) (c) Montoya Corporation Worksheet Month Ended December 31, 20X1 DEBIT ADJUSTMENTS 3 500 00 1700 00 850 00 6050 00 (a) (b) (c) CREDIT 3 500 00 1700 00 850 00 605000