Question

Carmen Camry operates a consulting firm called Help Today, which began operations on August 1. On August 31, the company’s records show the following selected accounts and amounts for the month of August.
Cash $25,330 Dividends $5,960
Accounts receivable 22,330 Consulting fees earned 26,970
Office supplies 5,210 Rent expense 9,510
Land 43,980 Salaries expense 5,580
Office equipment 19,970 Telephone expense 840
Accounts payable 10,730 Miscellaneous expenses 490
Common stock 101,500

Required:
Use the above information to prepare an August 31 balance sheet

Answer 1

Answer:

Help Today

Balance Sheet

For the month ended August 31, 202x

Assets:

Cash $25,330

Accounts receivable $22,330

Office supplies $5,210

Land $43,980

Office equipment $19,970

Total assets: $116,820

Liabilities and stockholders' equity:

Accounts payable $10,730

Common stock $101,500

Retained earnings $4,590

Total liabilities and stockholders' equity: $116,820

Explanation:

Income statement:

Consulting fees earned $26,970

Rent expense $9,510

Salaries expense $5,580

Telephone expense $840

Miscellaneous expenses $490

Net income $10,550

Retained earnings = net income - dividends = $10,550 - $5,960 = $4,590