FINANCIAL ACCOUNTING PROJECT This project is meant for you to incorporate the se
ID: 2397291 • Letter: F
Question
FINANCIAL ACCOUNTING
PROJECT
This project is meant for you to incorporate the semester’s learnings into an actual scenario. You should work on this project as the topics are covered in class.
During the month of October of the current year, Dan’s Accounting Service was opened. The following transactions occurred.
Oct 1 Dan sold $70,000 worth of stock (50 shares) to start the business.
Oct 1 Dan purchased $9,500 worth of office equipment on account from Keene’s
Furniture Supply.
Oct 1 Dan paid October’s rent on the office. He wrote a check for $2,500.
Oct 2 Dan purchased $400 worth of office supplies for cash.
Oct 4 The telephone was installed. We paid $95 (Utilities Expense).
Oct 4 Dan placed an advertisement in the Anoka County Shopper. It cost $150 (cash).
Oct 4 Dan started a petty cash fund with $50 for a fund balance.
Oct 5 We purchased (for cash) $45 worth of stamps (Miscellaneous Expense).
Oct 5 A three-month umbrella insurance policy was purchased for $720 (cash).
Oct 7 Bebus’s Automotive Supply Company paid us $2,800 (cash) for setting up their
books.
Oct 9 We earned $3,200 from Dietz’s Fine Furniture Company for setting up their
books. They will pay us later.
Oct 12 We paid a part-time employee $90 for running errands. There are no taxes to be
withheld.
Oct 14 Smith’s Food Service, Inc. paid us $1,700 for helping them with their taxes.
The actual bill was for $3,500. They will pay us the rest next month.
Oct 19 We paid our part-time employee $80 for running errands. There are no taxes to be
withheld.
Oct 23 We sent a check for $1,000 to Keene’s Furniture Supply for the office equipment
purchased on October 1st.
Oct 26 We earned $800 for consulting with Anderson’s Clothing Outlet. They will pay
us later.
Oct 26 We paid our part-time employee $50 for running errands. There are no taxes to
be withheld.
Oct 30 Dietz’s Fine Furniture Company paid us $900 on account for the work we did
for them on October 9.
Oct 30 Dan paid the stockholders $600 in dividends.
Oct 31 Dan paid the electric bill which was $90.
Oct 31 Dan replenished the petty cash fund. He had used $12 for office supplies and $18
for miscellaneous expenses.
REQUIRED:
1) Prepare an Income Statement (don’t forget the Earnings Per Share)
2) Statement of Retained Earnings
3) Classified Balance Sheet
Explanation / Answer
Statement of income for the Month of October Amount($) Amount($) 1.Revenues Sale of Service 11200 Total 11200 2.Expenses Rent 2500 Office Supplies 412 Utility Expenses 95 Advt Expenses 150 Stamps 45 Insurance 240 Wages 220 Electricity 90 others exp 18 Total 4370 3.Operating Income/Net Income(1-2) 6830 Earning Per Share 1 Net Income 6830 2 No of shares 50 3 Earning per share (1/2) 136.6 Note:Assumed to be No tax Expenses Statement of Retained Earnings Balance at beginning 0 Add:Net profit during the Year 6830 Balance at the end 6830 Balance sheet for the month of october Assets Amount($) Liabilities Amount($) NON CURRENT ASSETS NoN Current Libilities Office Equipment 9500 Note payables 8500 Current Assets current Liabilities Accounts Receivable 4900 Owners Equity Prepaid Insurance 480 Common stock 70000 cash 70450 Retained earnings 6830 Total 85330 85330
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