Petre Company was started on January 1, Year 1. During Year 1, the company experienced the following

Question:

Petre Company was started on January 1, Year 1. During Year 1, the company experienced the following three accounting events:

(1) earned cash revenues of $14,500,

(2) paid cash expenses of $9,200,

(3) paid a $500 cash dividend to its stockholders.

These were the only events that affected the company during Year 1.

Required
a. Create an accounting equation and record the effects of each accounting event under the appropriate general ledger account headings.
b. Prepare an income statement, statement of changes in stockholders’ equity, and a balance sheet dated December 31, Year 1, for Petre Company.
c. Explain why the income statement uses different terminology to date the income statement than is used to date the balance sheet.

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... 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...

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