Journal Entries, Trial Balance, and Financial Statements (Appendix)

Refer to the transactions for Neveranerror Inc. in Problem 3-7.

Required 1. Prepare journal entries on the books of Neveranerror to record the transactions entered into during the month. Ignore depreciation expense and interest expense.

2. Prepare a trial balance at June 30, 2010.

3. Prepare the following fi nancial statements:

a. Income statement for the month ended June 30, 2010.

b. Statement of retained earnings for the month ended June 30, 2010.

c. Classifi ed balance sheet at June 30, 2010.

4. Assume that you have just graduated from college and have been approached to join this company as an accountant. From your reading of the fi nancial statements for the fi rst month, would you consider joining the company? Explain your answer.

Limit your answer to fi nancial considerations only.

AppendixLO1