Alfonso Sheen recently opened his own accounting firm, which he operates as a corporation. The name of

Question:

Alfonso Sheen recently opened his own accounting firm, which he operates as a corporation. The name of the new entity is Alfonso Sheen, CPA. Sheen experienced the following events during the organizing phase of the new business and its first month of operations in 2016:

Feb. 5 Sheen deposited $70,000 in a new business bank account titled Alfonso Sheen, CPA. The business issued common stock to Sheen.

6 Paid $350 cash for letterhead stationery for new office.

7 Purchased office furniture for the office on account, $7,000.

10 Consulted with tax client and received $1,800 for services rendered.

11 Paid utilities, $400.

12 Finished tax hearings on behalf of a client and submitted a bill for accounting services, $11,000.

18 Paid office rent, $1,000.

25 Received amount due from client that was billed on February 12.

27 Paid full amount of accounts payable created on February 7.

29 Cash dividends of $4,500 were paid to stockholders.

Requirements

1. Analyze the effects of the events on the accounting equation of Alfonso Sheen, CPA. Use a format similar to Exhibit 1-6.

2. Prepare the following financial statements:

a. Income statement.

b. Statement of retained earnings.

c. Balance sheet.

Common Stock
Common stock is an equity component that represents the worth of stock owned by the shareholders of the company. The common stock represents the par value of the shares outstanding at a balance sheet date. Public companies can trade their stocks on... Accounts Payable
Accounts payable (AP) are bills to be paid as part of the normal course of business.This is a standard accounting term, one of the most common liabilities, which normally appears in the balance sheet listing of liabilities. Businesses receive...