Question

Elliptical Consulting is a consulting firm owned and operated by Jayson Neese. The following end-of-period spreadsheet was prepared for the year ended June 30, 2016:
Elliptical Consulting
End-of-Period Spreadsheet
For the Year Ended June 30, 2016
Unadjusted Trial Balance Adjustments Adjusted Trial Balance
Account Title Dr. Cr. Dr. Cr. Dr. Cr.
Cash 27,000 27,000
Accounts Receivable 53,500 53,500
Supplies 3,000 (a) 2,100 900
Office Equipment 30,500 30,500
Accumulated Depreciation 4,500 (b) 1,500 6,000
Accounts Payable 3,300 3,300
Salaries Payable (c) 375 375
Common Stock 30,000 30,000
Retained Earnings 52,200 52,200
Dividends 2,000 2,000
Fees Earned 60,000 60,000
Salary Expense 32,000 (c) 375 32,375
Supplies Expense (a) 2,100 2,100
Depreciation Expense (b) 1,500 1,500
Miscellaneous Expense 2,000 2,000
150,000 150,000 3,975 3,975 151,875 151,875
Based on the preceding spreadsheet, prepare an income statement, retained earnings statement, and balance sheet for Elliptical Consulting. Be sure to read the instructions for each financial statement carefully.

Answer 1

Answer and Explanation:

The Preparation of income statement, retained earnings statement, and balance sheet is prepared below:-

                                          Elliptical Consulting

                                           Income statement

                           For the Year Ended June 30, 2016

Particulars                                    Amount

Revenue      

Fees earned                                 $60,000  

Less:

Expenses      

Salary expense               $32,375    

Supplies expense           $2,100    

Depreciation expense    $1,500    

Miscellaneous expense $2,000    

Total expense                                 $37,975  

Net income                                      $22,025

                                       Elliptical Consulting

                                       Retained earning

                            For the Year Ended June 30, 2016

Particulars                                            Amount

Opening balance                                 $52,200  

Add:Net income for the year               $22,025  

Total                                                       $74,225  

Less: Dividends                                       $2,000  

Closing balance of retained

earnings                                                  $72,225

                                    Elliptical Consulting

                                      Balance Sheet

                        For the Year Ended June 30, 2016

Particulars                                            Amount

Assets

Cash                             $27,000  

Accounts receivable   $53,500  

Supplies                       $900  

Total current assets                             $81,400  

Property plant and equipment

Office Equipment      $30,500  

Less:Accumulated

Depreciation              $6,000             $24,500  

Total Assets                                         $105,900  

Liabilities & Stockholder's Equity

Accounts payable     $3,300

Salaries payable        $375

Total liabilities                                      $3,675

Stockholder's Equity    

Common Stock        $30,000  

Retained earnings    $72,225  

total stockholders Equity                    $102,225  

Total liabilities and Stockholder's

Equity                                                    $105,900