Answer:
A. Net Income = $22,790
B. Shareholders' equity balance is = $69,490
Explanation:
Requirement A:
Les Stanley
Income Statement
For the year ended, July 31, 2015
Revenues:
Fees Earned $28,500 (1)
Expenses:
Rent expenses $2,600 (3)
Automobile Expense $2,000 (4)
Office Salaries $4,200 (5)
Miscellaneous expense$ 800 (6)
Interest Expense $ 110 (7)
Total Expenses $5,710
Net Income $22,790
Note - 1: Fees earned = $28,500 (Journal 3)
2. Common stock = $50,500 (Journal 1)
3. Rent expense (Journal 4)
4. Automobile expense (Journal 5)
5. Office salaries (Journal 7)
6. Miscellaneous expense (Journal 6)
7. Interest on payable (Journal 8)
8. Dividends (Journal 10)
Requirement B:
Les Stanley
Statement of shareholders equity
For the year ended, July 31, 2015
Particulars Share R. E* Total
Balances, July 1, 2015 $0 0 $0
Add: Issued Capital $50,500 (2) 0 $50,500
Add: Net Income $0 $22,790 $22,790
Less: Dividends (8) $0 $(3,800) $(3,800)
Balances, July 31, 2015 $50,500 $18,990 $69,490
Therefore, shareholders' equity balance is = $69,490
