Comprehensive Problem 1 Part 8:

The following is a comprehensive problem which encompasses all of the elements learned in previous chapters. You can refer to the objectives for each chapter covered as a review of the concepts.

NOTE: You must complete parts 1, 2, 3, 4, 6 and 7 before completing part 8. Part 5 is optional.

Prepare an income statement.

Kelly Consulting Income Statement For the Month Ended May 31, 20Y8
Fees earnedInsurance expenseRent expenseSalary expenseUtilities expenseFees earned		$fill in the blank 2
Expenses:
CashFees earnedSalary expenseSalaries payableUtilities expenseSalary expense	$fill in the blank 4
CashOffice equipmentPrepaid rentRent expenseUtilities expenseRent expense	fill in the blank 6
Accounts receivableFees earnedSuppliesSupplies expenseUtilities expenseSupplies expense	fill in the blank 8
Accounts payableAccumulated depreciationDepreciation expenseUtilities expenseUnearned feesDepreciation expense	fill in the blank 10
CashFees earnedInsurance expensePrepaid insuranceUtilities expenseInsurance expense	fill in the blank 12
Accounts payableAccounts receivableIncome summaryMiscellaneous expenseUtilities expenseMiscellaneous expense	fill in the blank 14
Common stockFees earnedRetained earningsTotal expensesUtilities expenseTotal expenses		fill in the blank 16
Kelly Pitney, drawingIncome summaryNet incomeNet lossUtilities expenseNet income		$fill in the blank 18

Prepare a statement of stockholders equity. If an amount box does not require an entry, leave it blank. If a net loss is incurred or dividends were paid, enter that amount as a negative number using a minus sign.

Kelly Consulting Statement of Stockholders Equity For the Month Ended May 31, 20Y8
	Common Stock	Retained Earnings	Total
Balances, May 1, 20Y8Balances, May 31, 20Y8DividendsNet incomeNet lossBalances, May 1, 20Y8	$fill in the blank 20	$fill in the blank 21	$fill in the blank 22
Balances, May 1, 20Y8Balances, May 31, 20Y8Change in retained earningsNet incomeNet lossNet income	fill in the blank 24	fill in the blank 25	fill in the blank 26
Balances, May 1, 20Y8Balances, May 31, 20Y8DividendsNet incomeNet lossDividends	fill in the blank 28	fill in the blank 29	fill in the blank 30
Balances, May 1, 20Y8Balances, May 31, 20Y8DividendsNet incomeNet lossBalances, May 31, 20Y8	$fill in the blank 32	$fill in the blank 33	$fill in the blank 34

Prepare a balance sheet.

Kelly Consulting Balance Sheet May 31, 20Y8
Assets			Liabilities
Current assets:			Current liabilities:
CashFees earnedOffice equipmentKelly Pitney, capitalUnearned feesCash	$fill in the blank 36		Accounts payableAccounts receivableCashCommon stockRetained earningsAccounts payable	$fill in the blank 38
Accounts payableAccounts receivableFees earnedSalaries payableUnearned feesAccounts receivable	fill in the blank 40		Accounts receivablePrepaid insurancePrepaid rentSalaries payableSalary expenseSalaries payable	fill in the blank 42
Accounts payableFees earnedSuppliesSupplies expenseUnearned feesSupplies	fill in the blank 44		Accounts receivableCommon stockFees earnedRetained earningsUnearned feesUnearned fees	fill in the blank 46
Accounts payableMiscellaneous expenseOffice equipmentPrepaid rentRent expensePrepaid rent	fill in the blank 48
CashInsurance expensePrepaid insuranceSalaries payableSupplies expensePrepaid insurance	fill in the blank 50		Total liabilities		$fill in the blank 51
Total current assets		$fill in the blank 52
Property, plant, and equipment:			Stockholders Equity
Accounts payableFees earnedOffice equipmentPrepaid insuranceRent expenseOffice equipment	$fill in the blank 54		Accounts payableCommon stockOffice equipmentPrepaid insuranceRent expenseCommon stock	$fill in the blank 56
Accounts payableAccumulated depreciationDepreciation expenseOffice equipment Unearned feesAccumulated depreciation	fill in the blank 58		Accounts receivableFees earnedOffice equipmentRetained earningsSalaries payableRetained earnings	fill in the blank 60
Total property, plant, and equipment		fill in the blank 61	Total stockholders equity		fill in the blank 62
Total assets		$fill in the blank 63	Total liabilities and stockholders equity		$fill in the blank 64

Feedback

a. The income statement is prepared directly from the information in the income statement columns of the worksheet. Expenses are typically listed in order of size and miscellaneous expense is listed last, regardless of its amount.

b. The statement of stockholders' equity shows the beginning balances of common stock and retained earnings. The common stock balance will be increased by any stock issued during the period and retained earnings will be increased by any net income, and decreased by any net losses and dividends.

c. The balance sheet includes all accounts that would be transferred to the balance sheet columns on the worksheet, except for the dividends balances. The ending retained earnings in the balance sheet must be the same amount as that calculated in the statement of stockholders' equity. Make sure that the accounting equation remains in balance for this financial statement.