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    Income statement, retained earnings statement, and balance sheet.

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    On August 31, the balance sheet of Nashville Veterinary Clinic showed Cash $9,000, Accounts Receivable $1,700, Supplies $600, Office Equipment $6,000, Accounts Payable $3,600, Common Stock $13,000, and Retained Earnings $700. During September the following transactions occurred.

    1. Paid $2,900 cash on accounts payable.

    2. Collected $1,300 of accounts receivable.

    3. Purchased additional office equipment for $2,100, paying $800 in cash and the balance on account.

    4. Earned revenue of $8,000, of which $2,500 is paid in cash and the balance is due in October.

    5. Paid cash dividends of $1,000.

    6. Paid salaries $1,700, rent for September $900, and advertising expense $300.

    7. Incurred utilities expense for month on account $170.

    8. Received $10,000 from Capital Bankâ?"money borrowed on a note payable.

    Hint: Analyze transactions and prepare income statement, retained earnings statement, and balance sheet.
    (SO 6, SO 7 and SO 8)

    Instructions

    (a) Prepare a tabular analysis of the September transactions beginning with August 31 balances. The column headings should be as follows: Cash + Accounts Receivable + Supplies + Office Equipment = Notes Payable + Accounts Payable + Common Stock + Retained Earnings.

    (a) Ending retained earnings $4,630

    (b) Prepare an income statement for September, a retained earnings statement for September, and a balance sheet at September 30.

    (b) Net income $4,930

    Total assets $29,800

    © BrainMass Inc. brainmass.com April 3, 2020, 10:17 pm ad1c9bdddf
    https://brainmass.com/business/financial-statements/income-statement-retained-earnings-statement-and-balance-sheet-431921

    Solution Summary

    Income statement, retained earnings statements and balance sheets are prepared.

    $2.19

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