Section I:

On May 31, 2021, Deana's Services Company had account balances as follows:

Accounts payable	$9,900
Accounts receivable	26,550
Cash	15,340
Fees earned	85,000
Insurance expense	1,485
Building	225,000
Accumulated depreciation	75,000
Land	174,400
Depreciation expense	1,500
Prepaid rent	2,000
Short-term mortgage payable	25,800
Long-term mortgage payable	224,600
Rent expense	7,000
Salary expense	35,300
Dividends	16,000
Supplies	1,000
Supplies expense	925
Utility expense	3,800
Capital stock	75,000
Retained earnings (beginning balance on May 1, 2021)	15,000

Present, in good form, (a) an income statement for May, (b) a statement of stockholders equity as of May 31, and (c) a classified balance sheet as of May 31, showing current assets, fixed assets, current liabilities, long term liabilities, stockholders' equity.

(a)

Deana's Services Company

Income Statement

For the Month Ended May 31, 2021

__

Deana's Services Company

Statement of Stockholders Equity

For the Month Ended May 31, 2021

(c)

Deana's Services Company

Classified Balance Sheet

May 31, 2021

Section II:

1. Danielle Dog is the sole stockholder in Dog, the Beauty Hunter, Inc., a modeling agency. Below are transactions which occurred in the operation of the company during the month of June. Record each transaction on the worksheet that has been supplied for this purpose, including entries in the description column for any amounts entered into Retained Earnings. There is no need to total all of the columns.
   • June 2 Purchased equipment at a cost of $16,800, making a cash down payment of $3,000 and obtaining a bank loan for the rest.

• June 10 Performed services for a client on account, of $13,000.
• June 20 Made a payment on account, $500
• June 24 Received payment from a client on account for services previously provided, $5,000
• June 27 Paid $1,250 to the bank. Of that amount, $1,000 was repayment of the loan and $250 was interesting.
• June 28 Paid salaries for June, $7,000
  • June 30 Paid a dividend, $2,000

Assets = Liabilities + Stockholders' Equity
Date	Cash	Accounts Receivable	Supplies	Equipment	Accum. Depreciation	Accounts Payable	Bank loan payable	Capital Stock	Retained Earnings	Description of Retained Earnings transaction
6/2
6/10
6/20
6/24
6/27
6/28
6/30
(b)
(c)

Section III:

There are 3 parts to this problem.

1. There are 2 reasons why certain assets depreciate. List those reasons here:
   1. ___________________________________________________
   2. ___________________________________________________

2. From section II, Dog's equipment has a useful life of 3 years. Calculate the depreciation for the month of June in the space below, showing all work. Also, make the adjustment for the depreciation in section II, (b).

3. Dog's supplies on hand at the end of June amounted to $300. It started the month (June 1) with $700 of supplies. Make the adjustment for supplies expense for the month of June in section II, (c).