Richard Mordica started his own delivery service, Speedy Service Inc., on June 1, 2010. The following transactions
Question:
Richard Mordica started his own delivery service, Speedy Service Inc., on June 1, 2010. The following transactions occurred during the month of June. June 1 Stockholders invested $15,000 cash in the business in exchange for common stock.
2 Purchased a used van for deliveries for $15,000. Richard paid
$2,000 cash and signed a note payable for the remaining balance.
3 Paid $500 for office rent for the month.
5 Performed $2,400 of services on account.
9 Paid $300 in cash dividends.
12 Purchased supplies for $150 on account.
15 Received a cash payment of $750 for services provided on June 5.
17 Purchased gasoline for $200 on account.
20 Received a cash payment of $1,500 for services provided.
23 Made a cash payment of $800 on the note payable.
26 Paid $250 for utilities.
29 Paid for the supplies purchased on account on June 12.
30 Paid $750 for employee salaries.
Instructions
(a) Show the effects of the previous transactions on the accounting equation using the following format. Assume the note payable is to be repaid within the year.
Include margin explanations for any changes in Retained Earnings.
(b) Prepare an income statement for the month of June.
(c) Prepare a classified balance sheet at June 30,2010.
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...
Step by Step Answer:
Financial Accounting Tools for Business Decision Making
ISBN: 978-0470239803
5th Edition
Authors: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso