Question: Selected accounts of Armstrong Consulting Inc a financial services business

Selected accounts of Armstrong Consulting, Inc., a financial services business, have the following balances at December 31, 2013, the end of its first year of operations. During the year, Lori Armstrong, the only shareholder, bought $20,000 of shares in the business.
Office Furniture $ 28,000
Utilities Expense 12,600
Accounts Payable 3,800
Note Payable 21,500
Service Revenue 141,500
Accounts Receivable 9,500
Supplies Expense 4,200
Rent Expense $36,000
Cash 5,400
Office Supplies 800
Salary Expense 43,000
Salaries Payable 2,000
Property Tax Expense 2,300
Equipment 22,000
1. Identify each as an asset, liability, revenue, or expense.
2. Prepare the income statement of Armstrong Consulting, Inc. for the year ended December 31, 2013. What is the result of operations for 2013?
3. Assuming the balance in Retained Earnings on December 31, 2013, was $18,400, what was the amount of the Dividends during the year? Answer by preparing a statement of retained earnings to solve for the dividends. Recall that the business has just completed its first year and has no beginning balance for retained earnings.

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  • CreatedJuly 08, 2015
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