Cecil Jameson, Attorney-at-Law, is organized as a corporation and operated by Ce

Question

Cecil Jameson, Attorney-at-Law, is organized as a corporation and operated by Cecil Jameson. On July 1, 2018, the company has the following assets, liabilities, and common stock: cash, $1,000; accounts receivable, $3,200; supplies, $850; land $10,00; accounts payable, $1,530; common stock, $10,00. Office space and office equipment are currently being rented, pending the construction of an office complex on land purchased last year. Business transactions during July are summarized as follows:
A. Received cash from clients for services, $3,928. B. Paid creditors on account, $1055. C. Received cash from Cecil Jameson as additional investment in exchange for common stock, $3,700. D. Paid office rent for the month, 1,200. E. Charge clients for legal services on account, $2,025. F. Purchased supply on account, $245. G. Received cash from clients on account, $3,000. H. Received invoice for paralegal service from Legal Aid Inc. for July (to be paid on August 10), $1,635. I. Paid the following: wages expense, $850; utilities expense, $325; answering service expense, $250; and miscellaneous expense, $75. J. Determined that the cost of supplies on hand was $980; therefore, the cost of supplies used during the month was $115. K. Paid dividends, $1,000.

Instructions
1. Determine the amount of retained earnings as of July 1, 2018. 2. State the assets, liabilities and stockholders’ equity as of July 1 in equation form similar to that shown in this chapter. In tabular form below the equation, indicate the increases and decreases resulting from each transaction and the new balances after each transaction. 3. Prepare an income statement for July, a retained earnings statement for July, and a balance sheet as of July 31, 2018. 4. (Optional) prepare a star menu of cash flows for July.



Cecil Jameson, Attorney-at-Law, is organized as a corporation and operated by Cecil Jameson. On July 1, 2018, the company has the following assets, liabilities, and common stock: cash, $1,000; accounts receivable, $3,200; supplies, $850; land $10,00; accounts payable, $1,530; common stock, $10,00. Office space and office equipment are currently being rented, pending the construction of an office complex on land purchased last year. Business transactions during July are summarized as follows:
A. Received cash from clients for services, $3,928. B. Paid creditors on account, $1055. C. Received cash from Cecil Jameson as additional investment in exchange for common stock, $3,700. D. Paid office rent for the month, 1,200. E. Charge clients for legal services on account, $2,025. F. Purchased supply on account, $245. G. Received cash from clients on account, $3,000. H. Received invoice for paralegal service from Legal Aid Inc. for July (to be paid on August 10), $1,635. I. Paid the following: wages expense, $850; utilities expense, $325; answering service expense, $250; and miscellaneous expense, $75. J. Determined that the cost of supplies on hand was $980; therefore, the cost of supplies used during the month was $115. K. Paid dividends, $1,000.

Instructions
1. Determine the amount of retained earnings as of July 1, 2018. 2. State the assets, liabilities and stockholders’ equity as of July 1 in equation form similar to that shown in this chapter. In tabular form below the equation, indicate the increases and decreases resulting from each transaction and the new balances after each transaction. 3. Prepare an income statement for July, a retained earnings statement for July, and a balance sheet as of July 31, 2018. 4. (Optional) prepare a star menu of cash flows for July.



Cecil Jameson, Attorney-at-Law, is organized as a corporation and operated by Cecil Jameson. On July 1, 2018, the company has the following assets, liabilities, and common stock: cash, $1,000; accounts receivable, $3,200; supplies, $850; land $10,00; accounts payable, $1,530; common stock, $10,00. Office space and office equipment are currently being rented, pending the construction of an office complex on land purchased last year. Business transactions during July are summarized as follows:
A. Received cash from clients for services, $3,928. B. Paid creditors on account, $1055. C. Received cash from Cecil Jameson as additional investment in exchange for common stock, $3,700. D. Paid office rent for the month, 1,200. E. Charge clients for legal services on account, $2,025. F. Purchased supply on account, $245. G. Received cash from clients on account, $3,000. H. Received invoice for paralegal service from Legal Aid Inc. for July (to be paid on August 10), $1,635. I. Paid the following: wages expense, $850; utilities expense, $325; answering service expense, $250; and miscellaneous expense, $75. J. Determined that the cost of supplies on hand was $980; therefore, the cost of supplies used during the month was $115. K. Paid dividends, $1,000.

Instructions
1. Determine the amount of retained earnings as of July 1, 2018. 2. State the assets, liabilities and stockholders’ equity as of July 1 in equation form similar to that shown in this chapter. In tabular form below the equation, indicate the increases and decreases resulting from each transaction and the new balances after each transaction. 3. Prepare an income statement for July, a retained earnings statement for July, and a balance sheet as of July 31, 2018. 4. (Optional) prepare a star menu of cash flows for July.

Explanation / Answer

Cash + Accounts Receivable + Supplies + Land = Accounts Payable + Common Stock + Retained Earning 01-Jul-18 1000 3200 850 10000 1530 10000 3520 =1000+3200+850+10000-1530-10000 A 3928 3928 Bal 4928 3200 850 10000 1530 10000 7448 B -1055 -1055 Bal 3873 3200 850 10000 475 10000 7448 C 3700 3700 Bal 7573 3200 850 10000 475 13700 7448 D -1200 -1200 Bal 6373 3200 850 10000 475 13700 6248 E 2025 2025 Bal 6373 5225 850 10000 475 13700 8273 F 245 245 Bal 6373 5225 1095 10000 720 13700 8273 G 3000 -3000 Bal 9373 2225 1095 10000 720 13700 8273 H 1635 -1635 Bal 9373 2225 1095 10000 2355 13700 6638 I -1500 -1500 =-850-325-250-75 Bal 7873 2225 1095 10000 2355 13700 5138 J -115 -115 Bal 7873 2225 980 10000 2355 13700 5023 K -1000 -1000 Closing 6873 2225 980 10000 2355 13700 4023 Income Statement Revenue 5953 =3928+2025 Less: Expenses Office Rent 1200 Legal Expense 1635 Wages Expense 850 Utility expense 325 Answering service expense 250 Miscellaneous Expense 75 Supply Expense 115 Total Expense 4450 Net Income 1503 =5953-1618 Statement of Retained Earning Opening bal 3520 Add: Net income 1503 Less: Dividend 1000 4023 =3520+1618-1000 Balance Sheet Assets Amount Liability Amount Cash 6873 Accounts Payable 2355 Accounts Receivable 2225 Common Stock 13700 Supplies 980 Reatined Earning 4023 Land 10000 20078 20078 4 Cash flow Cash Flow from operating activities Received from operation 6928 =3928+3000 Paid for expenses -3755 =-1055-1200-850-325-250-75 Cash flow from operations 3173 Cash flow from financing activity Issue of common stock 3700 Dividend Paid -1000 Cash flow from financing activity 2700 Net cash flow during the period 5873 Add:Opening balance 1000 Closing Balance 6873

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