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    Tabualar analysis & income statement

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    P3-3A Mark Mader created a corporation providing legal services, Mark Mader Inc., on
    July 1, 2007.

    On July 31 the balance sheet showed: Cash $4,000; Accounts Receivable
    $2,500; Supplies $500; Office Equipment $5,000; Accounts Payable $4,200; Common Stock
    $6,200; and Retained Earnings $1,600. During August the following transactions occurred.
    1. Collected $1,500 of accounts receivable due from customers.
    2. Paid $2,700 cash for accounts payable due.
    3. Earned revenue of $6,400, of which $3,000 is collected in cash and the balance is due
    in September.
    4. Purchased additional office equipment for $2,000, paying $400 in cash and the balance
    on account.
    5. Paid salaries $1,400, rent for August $900, and advertising expenses $350.
    6. Declared and paid a cash dividend of $700.
    7. Received $2,000 from Standard Federal Bank; the money was borrowed on a 4-month
    note payable.
    8. Incurred utility expenses for the month on account $450.

    Instructions

    (a) Prepare a tabular analysis of the August transactions beginning with July 31 balances.
    The column heading should be: Cash  Accounts Receivable  Supplies  Office
    Equipment  Notes Payable  Accounts Payable  Common Stock  Retained Earnings.
    Include margin explanations for any changes in Retained Earnings.
    (b) Prepare an income statement for August, a retained earnings statement for August,
    and a classified balance sheet at August 31.

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    Solution Summary

    The solution contains tabular analysis of accounting transactions and also preparation of income statement from the accounting transactions.

    $2.19

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