Question
In June, Dr. Ella Barnes organized a corporation to provide veterinary services. The company, called Barnes Inc, began operations immediately. The business transactions are shown
In June, Dr. Ella Barnes organized a corporation to provide veterinary services. The company, called Barnes Inc, began operations immediately. The business transactions are shown below:
| June 1 | The corporation issued 70,000 shares of capital stock to Dr. Ella Barnes in exchange for $70,000 cash |
| June 4 | Purchased an office building for $220,000. A cash payment of $40,000 was made at the time of the purchase, and a note payable was issued for the remaining balance. |
| June 5 | Issued 20,000 shares of capital stock to new shareowner in exchange for $20,000 cash. |
| June 9 | Paid LabQuest $2500 to rent an x-ray machine for the month. |
| June 15 | Billed customers $9,500 for veterinary services performed during first half of June. |
| June 15 | Paid $3500 in salaries earned by employees during the first half of June. |
| June 24 | Paid MaidsRUs $800 for weekly cleaning services. |
| June25 | Collected $5910 of the amounts billed to customers on June 15th. |
| June 30 | Billed customers $16450 for veterinary services performed during the second half of the month. |
| June 30 | Paid $8000 in salaries earned by employees during the second half of the month. |
| June 30 | Received a $1510 bill from Purina for pet food and supplies purchased in June. The entire amount is due July 10th. |
| June 30 | Recorded depreciation expense of $1500 on office building. |
| June 30 | Declared and paid a $1000 dividend. |
Required:
- Analyze the effects that each of these transactions will have on the following six components of the companys financial statements for the month of June. Organize your answer in tabular form using the column headings shown below. The first is done for you as an example.
Income Statement Balance Sheet
| Date | Revenues - | Expenses = | NI | Assets = | Liabilities + | O/Equity |
| 6/1 | NE | NE | NE | +$70,000 | NE | +$70,000 |
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- Prepare journal entries in the general journal for each transaction.
- Post entries to the general ledger.
- Prepare a trial balance in good form.
- Prepare an Income Statement in good form.
- Calculate the new Retained Earnings balance.
- Prepare a Balance Sheet as of June 30th in good form.
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