Financial information related to Joshua Tree Interiors for August and September

Question

Financial information related to Joshua Tree Interiors for August and September 2010 is as follows:

August 31, 2010 September 30, 2010
Accounts payable $ 40,000 $ 55,000
Accounts receivable 75,000 90,000
Capital stock 60,000 60,000
Retained earnings ? ?
Cash 110,000 140,000
Supplies 15,000 20,000


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Prepare balance sheets for Joshua Tree Interiors as of August 31 and as of September 30, 2010.
Determine the amount of net income for September, assuming that no additional capital stock was issued and no dividends were paid during the month.
Determine the amount of net income for September, assuming that no additional capital stock was issued but dividends of $17,500 were paid during the month.

Explanation / Answer

Assets Cash 110,000 140,000 A/R 75,000 90,000 Supplies 15,000 20,000 Total Assets 200,000 250,000 Liabilities Accout Payable 40,000 55,000 StockHolders Equity Capital stock 60,000 60,000 Retained Earnings Capital stock 60,000 60,000 Less Dividents 0 17,500 R/E an stockholders equity60,000 42,500 Net Income can't be determined from information above. No Sales and Expense numbers.

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