Answer:
1. Carissa Communications' Statement of Retained Earnings for the year ended July 31, 2018:
Retained Earnings, July 31, 2017 $0
Net Income (Loss) 6,845
Retained Earnings, July 31, 2018 $6,845
2. Carissa Communications' Classified Balance Sheet as of July 31, 2018:
Assets:
Current Assets:
Cash $ 3,500
Accounts Receivable 3,000
Merchandise Inventory 1,300
Total Current Assets $7,800 $7,800
Long-term Assets:
Equipment, net 12,500 $12,500
Total Assets $20,300
Liabilities + Equity:
Current Liabilities:
Accounts Payable 1,900
Accrued Liabilities 5,855
Total Current Liabilities $7,755 $7,755
Long-term Liabilities:
Notes Payable, long-term 3,400
Total Liabilities $11,155
Stockholders' Equity:
Common Stock 2,300
Retained Earnings 6,845
Total Stockholders' Equity 9,145 $9,145
Total Liabilities + Equity $20,300
Explanation:
a) Data and Calculations:
1. Adjusted Trial Balance for its first year of business, which ended on July 31, 2018
Cash $ 3,500
Cost of Goods Sold $ 18,400
Selling expenses 1,700
Equipment, net 12,500
Accounts Payable 1,900
Accrued Liabilities 5,855
Common Stock 2,300
Net Sales Revenue 30,000
Notes Payable, long-term 3,400
Accounts Receivable 3,000
Merchandise Inventory 1,300
Interest Expense 55
Administrative Expense 3,000
Total $43,455 $43,455
2. Carissa Communications Income Statement Year Ended July 31, 2018
Net Sales Revenue $30,000
Cost of Goods Sold 18,400
Gross Profit 11,600
Operating Expenses
Selling Expenses 1,700
Administrative Expenses 3,000
Total Operating Expenses 4,700
Operating Income 6,900
Interest Expense (55)
Net Income (Loss) $6,845
