1 Requirement #7: 2 3 Prepare the financial statements for the Quick Tax Corporation as of July 31 in the space below. 4 You will only be preparing the income statement, statement of retained earnings, and the balance sheet 5 The statement of cash flows is a required financial statement, but is not required for this case study. 7 8 9 Quick Tax Corporation Income Statement For the Month Ending July 31 Quick Tax Corporation Statement of Retained Eamings For the Month Quick Tax Corporation Balance Sheet July 31 11 Revenues 12 Revenue Retained Eamings, July 1 368 TL Assets: Cash Supplies Prepaid Insurance Equipment Less: Accum. Depr. Total Assets 14 Expenses: 15 Rent Expense 16 Salaries Expense 17 Insurance Expense 18 Supplies Expense 19 Depreciation Expense 20 Income Tax Expense 21 Total Expenses 23 Net Income Liabilities: Accounts Payable Income Tax Payable Total Liabilities Stockholders' Equity Common Stock Retained Eamings Total Stockholders' Equity Total Liabilities and Stockholders' Equity 25 Requirement 8: 3 Prepare the closing entries at July 31 in the General Journal below. General Joumal Description (Account Name) Debit 26 Requirement #9: 28 Post the closing entries to the General Ledger T accounts and compute ending balances. 29 Just add to the adjusted balances already listed. 1 Requirement #1: 2 During its first month of operation, the Quick Tax Corporation, which specializes in tax preparation, 3 completed the following transactions. 5 July 1 Began business by making a deposit in a company bank account of $40,000, in exchan for 4,000 shares of $10 par value common stock. Paid the current month's rent, $2,500 8 July 3 9 10 July 5 11 12 July 7 Paid the premium on a 1-year insurance policy. $3,600 Purchased supplies on account from Little Company, $700. 14 July 10 Paid employee salaries, $2,800 16 July 14 Purchased equipment from Lake Company, $9,500. Paid $1,500 down and the balance w placed on account. Payments will be $500.00 per month for 20 months. The first payment i Note: Use accounts payable for the balance due. 20 July 15 Received cash for preparing tax retums for the first half of July. $6,500 July 19 Made payment on account to Lake Company, $500. Received cash for preparing tax retums for the last half of July, $8,250 July 31 July 31 26 Declared and paid cash dividends of $450. Use the following account names for journal entries. Chart of Accounts: Account Title (Normal Balance) Assets Cash (Debit) Prepaid Insurance (Debit) Supplies (Debit) Equipment (Debit) Accumulated Depreciation - Equipment (Credit) Liabilities Accounts Payable (Credit) Income Tax Payable (Credit) Stockholders' Equity Common Stock (Credit) Retained Eamings (Credit) Dividends (Debit) Revenue Tax Preparation Revenue (Credit) Expenses Rent Expense (Debit) Salaries Expense (Debit) Insurance Expense (Debit) Supplies Expense (Debit) Depreciation Expense (Debit) Income Tax Expense (Debit) Prepare journal entries to record the July transactions in the General Journal below. Credit Date July 1 General Joumal Description (Account Name) Debit Cash 40,000 Common Stock 40,000 5 July 3 2,500 Rent Expense Cash 2,500 9 July 5 3,600 Prepaid Insurance Cash 3,600 42 July 7 700 Supplies Accounts Payable 700 44 45 July 10 2,800 Salaries Expense Cash 2,800 48 July 14 9,500 Equipment Cash Accounts Payable 1,500 8,000 52 July 15 6,500 Cash Tax Preparation Revenue 6,500 55 July 19 Accounts Payable Cash 500 500 8,250 58 July 19 60 July 31 8,250 Accounts Payable Cash Cash Tax Preparation Revenue Dividends Cash 450 62 July 31 450