PART 15

Prepare a STATEMENT OF RETAINED EARNINGS for the month ending March 31, 20XX. Note that March is the first month of OPERATIONS and DIVIDENDS were not paid during March.

EXPERT CONSULTING SERVICES, INC.

STATEMENT OF RETAINED EARNINGS

FOR MONTH ENDING MARCH 31, 20XX

MARCH TRANSACTIONS

Mar 2: Received contributions of $20,000 cash from each of the two owners and issued 1,000 shares of common stock ($1 par value) to each owner.

Mar 7: Signed a two-year promissory note to the bank and received a cash loan of $15,000. Both principle and interest are due at the end of two years.

Mar 12: Purchased $700 in miscellaneous supplies on account. Payment is due in 30 days.

Mar 19: Expert Consulting, Inc. billed a client $4,000 for services rendered to install a new computer system. The client agreed to pay 25% of the bill upon its receipt. The remaining balance is due in 30 days.

Mar 20: Paid $1,300 to a local newspaper for advertising. The advertisements were already printed earlier in March.

Mar 22: Received 25% of the amount billed to the client on March 19.

Mar 26: Received cash of $2,800 for consulting services already rendered to a client.

Mar 29: Paid $8,000 cash to purchase a computer system for internal use in the consulting business.

Mar 30: Paid employees $3,300 of salaries and wages for work performed in March.

Mar 31: Paid gas, electric and water bills totaling $1,400. The utilities were consumed during March.

AJE 1

March DEPRECIATION EXPENSE for the computer system is $222.

AJE 2

SUPPLIES EXPENSE for March is $61.

AJE 3

INTEREST EXPENSE for March is $97.

AJE 4

INCOME TAX EXPENSE is 30% of the PRE-TAX INCOME amount.