Acc/300 - Week 2 - Individual Problem Set I

Problem Set 1

BEARDSLEY SERVICE CO. – INCOME STATEMENT for Month Ended June 30, 2014

Revenues

Service Revenue 7,500

Expenses

Advertising Expense 400

Supplies Expense 1,000

Maintenance and Repairs Expense 600

Utilities Expense 300

Salaries and Wages Expense 1,400

TOTAL EXPENSES 3,700 -3,700

3,800 3,800

BEARDSLEY SERVICE CO. – RETAINED EARNINGS STATEMENT for Month Ended June 30, 2014

Retained Earnings as of June 1, 2014

Net Income 3,800

3,800

Dividends (Less) 1,400

Retained Earnings for June 2014 2,400

BEARDSLEY SERVICE CO. – BALANCE SHEET for Month Ended June 30, 2014

Assets

Cash 4,600

Accounts Receivables 4,000

Supplies 2,400

Equipment 26,000

Total Assets 37,000

Liabilities and Stockholder’s Equity

Liabilities

Notes Payable 12,000

Accounts Payable 500

Total Liabilities 12,500

Stockholders’ Equity

Common Stock 22,100

Retained Earnings 2,400 24,500

Total Liability and Stockholders Equity 37,000

Note: Overall Beardsley Service Co. was very successful during its 1st month of business and receive net income. This is especially good for a company just starting out. However, distributing dividends at this time might be a little shaky. Instead, it may be more beneficial if Beardsley would consider growing its business and once it has grown in size by the expansion, it may be more feasible to distribute dividends to its stockholders.

Date Account Title and Explanation Debit Credit

April 1, 2014 Cash 18,000

Common Stock 18,000

1 This is not a transaction

2 Rent Expense 900

Cash 900

3 Supplies 1,300

Accounts Payable 1,300

10 Accounts Receivable 1,900

Service Revenue 1,900

11 Cash 700

Unearned Service Revenue...