Northeast Termite Specialists, Inc., was started when its owners invested $32,685 in the business in exchange for common stock on July 1, 2010. Part of the cash received to start the company was immediately used to purchase a $19,875 high-pressure chemical sprayer, which had a $2,875 residual value and an expected useful life of 10 years. The company earned $68,315 of cash revenue during the year and had cash operating expenses of $27,205. Prepare an income statement, statement of changes in shareholders’ equity, and statement of cash flows for the year ended June 30, 2011, and a balance sheet at June 30, 2011.
Answer to relevant QuestionsFrom the following list of accounts (1) identify the assets or liabilities that may require an adjustment at the end of the accounting period, and (2) indicate whether it relates to a deferral or an accrual.Cash ...The records of Poorman’s, Inc., revealed the following recorded amounts at December 31, 2009, before adjustments:Prepaid insurance ........... $ 2,700Cleaning supplies ........... 3,200Unearned service fees .......... ...On May 1, Matt Smith started a consulting business as a corporation. Matt started the business by contributing $20,000 in exchange for common stock. On May 1, he paid three months of rent in advance totaling $1,500. Rent ...Summit Climbing Tours has the following amounts in its records at the end of the fiscal year:Prepaid insurance ....... $9,000Unearned revenue ...... 2,500Wages expense ....... 9,500Accounts payable ...... 3,575Interest ...DVD-Online, Inc., is in its second year of business. The company is Web-based, offering DVD rental to online customers for a fixed monthly fee. For $30 per month, a customer receives three DVDs each month, one at a time as ...
Post your question