Journal Entries, Trial Balance, and Financial Statements (Appendix) Neveranerror Inc. was organized on June 2 by a group of accountants to provide accounting and tax services to small businesses. The following transactions occurred during the first month of business: Required: 1. Prepare journal entries on the books of Neveranerror Inc. to record the transactions entered into during the month. Ignore depreciation expense and interest expense. Indicate the effect on financial statement items by selecting "-" for decrease (or negative effect), "+" for increase (or positive effect) and "NE" for No Entry (or no effect) on the financial statement. June 2: Received contributions of $9,450 from each of the three owners of the business in exchange for shares of stock. Journal Balance Sheet Income Statement Stockholders' Net Date Description Debit Credit Assets = Liabilities + Equity Revenues Expenses Income June 2 Cash 28,350 + NE NE NE NE NE Capital stock 28,350 + NE + NE NE NE June 5: Purchased a computer system for $12,100. The agreement with the vendor requires a down payment of $2,650 with the balance due in 60 days. Journal Balance Sheet Income Statement Stockholders' Net Date Description Debit Credit Assets = Liabilities + Equity Revenues Expenses = Income June 5 Computer 12,000 + NE NE NE NE NE Cash 2,650 NE NE NE Accounts payable 9,350 NE NE NE June 8: Signed a two-year promissory note at the bank and received cash of $19,700. Journal Balance Sheet Income Statement Stockholders' Net Date Description Debit Credit Assets Liabilities + Equity Revenues Expenses Income June 8 Cash 19,700 + NE NE NE NE NE 19,700 Notes payable June 15: Billed $13,970 to clients for the first half of June. Clients are billed twice a month for services performed during the month, and the bills are payable within ten days. Journal Balance Sheet Income Statement Stockholders' Net Debit Credit Assets Llabilities Equity Revenues Expenses Income Date Description June 15 Accounts receivable Service expense June 17: Paid a $840 bill from the local newspaper for advertising for the month of June. Journal Balance Sheet Income Statement Stockholders' Net Date Description Debit Credit Assets Liabilities + Equity Revenues Expenses Income June 17 June 23: Received the amounts billed to clients for services performed during the first half of the month. Journal Balance Sheet Income Statement Stockholders' Net Date Description Debit Credit Assets Liabilities Equity Revenues Expenses Income June 23 June 28: Received and paid gas, electric, and water bills. The total amount is $2,680. Journal Balance Sheet Income Statement Net Stockholders' Equity Date Description Debit Credit Assets Liabilities Revenues Expenses Income June 28 June 29: Received the landlord's bill for $2,010 for rent on the office space that Neveranerror leases. The bill is payable by the 10th of the following month. Journal Balance Sheet Income Statement Net Stockholders' Equity Date Description Debit Credit Assets Liabilities Revenues Expenses Income June 29 June 30: Paid salaries and wages for June. The total amount is $5,670. Journal Balance Sheet Income Statement Stockholders' Net Date Description Debit Credit Assets Liabilities Equity Revenues Expenses Income June 30 June 30: Billed $18,060 to clients for the second half of June. Journal Balance Sheet Income Statement Stockholders' Net Income Date Description Debit Credit Assets Liabilities Equity Revenues Expenses June 30 June 30: Declared and paid dividends in the amount of $5,550. Journal Balance Sheet Income Statement Stockholders' Net Date Description Debit Credit Assets Liabilities Equity Revenues Expenses Income June 30 2. Prepare a trial balance at June 30. If an amount box does not require an entry, leave it blank. Neveranerror Inc. Trial Balance June 30 Debits Credits Cash Accounts receivable Computer Dividends Notes payable Rent expense Capital stock Totals $ 3a. Prepare the income statement for the month of June. Neveranerror Inc. Income Statement For the Month of June Expenses: $ 3b. Prepare the statement of retained earnings for the month of June. If an amount is zero, enter "O". Neveranerror Inc. Statement of Retained Earnings For the Month of June 3c. Prepare the classified balance sheet at June 30. Neveranerror Inc. Balance Sheet June 30 Assets Current assets: $ 8 $ Total current assets Property, plant, and equipment: Total assets $ Liabilities and Stockholders' Equity Current liabilities: $ Long-term debt: Total liabilities LA Total stockholders' equity Total liabilities and stockholders' equity 4. From your reading of the financial statements for the first month, would you consider working at the company? Why? The company able to generate revenues and control costs. The profit margin was and current ratio was Journal Entries, Trial Balance, and Financial Statements (Appendix) Neveranerror Inc. was organized on June 2 by a group of accountants to provide accounting and tax services to small businesses. The following transactions occurred during the first month of business: Required: 1. Prepare journal entries on the books of Neveranerror Inc. to record the transactions entered into during the month. Ignore depreciation expense and interest expense. Indicate the effect on financial statement items by selecting "-" for decrease (or negative effect), "+" for increase (or positive effect) and "NE" for No Entry (or no effect) on the financial statement. June 2: Received contributions of $9,450 from each of the three owners of the business in exchange for shares of stock. Journal Balance Sheet Income Statement Stockholders' Net Date Description Debit Credit Assets = Liabilities + Equity Revenues Expenses Income June 2 Cash 28,350 + NE NE NE NE NE Capital stock 28,350 + NE + NE NE NE June 5: Purchased a computer system for $12,100. The agreement with the vendor requires a down payment of $2,650 with the balance due in 60 days. Journal Balance Sheet Income Statement Stockholders' Net Date Description Debit Credit Assets = Liabilities + Equity Revenues Expenses = Income June 5 Computer 12,000 + NE NE NE NE NE Cash 2,650 NE NE NE Accounts payable 9,350 NE NE NE June 8: Signed a two-year promissory note at the bank and received cash of $19,700. Journal Balance Sheet Income Statement Stockholders' Net Date Description Debit Credit Assets Liabilities + Equity Revenues Expenses Income June 8 Cash 19,700 + NE NE NE NE NE 19,700 Notes payable June 15: Billed $13,970 to clients for the first half of June. Clients are billed twice a month for services performed during the month, and the bills are payable within ten days. Journal Balance Sheet Income Statement Stockholders' Net Debit Credit Assets Llabilities Equity Revenues Expenses Income Date Description June 15 Accounts receivable Service expense June 17: Paid a $840 bill from the local newspaper for advertising for the month of June. Journal Balance Sheet Income Statement Stockholders' Net Date Description Debit Credit Assets Liabilities + Equity Revenues Expenses Income June 17 June 23: Received the amounts billed to clients for services performed during the first half of the month. Journal Balance Sheet Income Statement Stockholders' Net Date Description Debit Credit Assets Liabilities Equity Revenues Expenses Income June 23 June 28: Received and paid gas, electric, and water bills. The total amount is $2,680. Journal Balance Sheet Income Statement Net Stockholders' Equity Date Description Debit Credit Assets Liabilities Revenues Expenses Income June 28 June 29: Received the landlord's bill for $2,010 for rent on the office space that Neveranerror leases. The bill is payable by the 10th of the following month. Journal Balance Sheet Income Statement Net Stockholders' Equity Date Description Debit Credit Assets Liabilities Revenues Expenses Income June 29 June 30: Paid salaries and wages for June. The total amount is $5,670. Journal Balance Sheet Income Statement Stockholders' Net Date Description Debit Credit Assets Liabilities Equity Revenues Expenses Income June 30 June 30: Billed $18,060 to clients for the second half of June. Journal Balance Sheet Income Statement Stockholders' Net Income Date Description Debit Credit Assets Liabilities Equity Revenues Expenses June 30 June 30: Declared and paid dividends in the amount of $5,550. Journal Balance Sheet Income Statement Stockholders' Net Date Description Debit Credit Assets Liabilities Equity Revenues Expenses Income June 30 2. Prepare a trial balance at June 30. If an amount box does not require an entry, leave it blank. Neveranerror Inc. Trial Balance June 30 Debits Credits Cash Accounts receivable Computer Dividends Notes payable Rent expense Capital stock Totals $ 3a. Prepare the income statement for the month of June. Neveranerror Inc. Income Statement For the Month of June Expenses: $ 3b. Prepare the statement of retained earnings for the month of June. If an amount is zero, enter "O". Neveranerror Inc. Statement of Retained Earnings For the Month of June 3c. Prepare the classified balance sheet at June 30. Neveranerror Inc. Balance Sheet June 30 Assets Current assets: $ 8 $ Total current assets Property, plant, and equipment: Total assets $ Liabilities and Stockholders' Equity Current liabilities: $ Long-term debt: Total liabilities LA Total stockholders' equity Total liabilities and stockholders' equity 4. From your reading of the financial statements for the first month, would you consider working at the company? Why? The company able to generate revenues and control costs. The profit margin was and current ratio was