On July 1, 2016, Pat Glenn established Half Moon Realty. Pat completed the follo
ID: 2445941 • Letter: O
Question
On July 1, 2016, Pat Glenn established Half Moon Realty. Pat completed the following transactions during the month of July.
A. Opened a business bank account with a deposit of $20,000 in exchange for common stock. B. Paid rent on office and equipment for the month, $3,200. C. Paid automobile expenses (including rental charge) for month, $1,450, and miscellaneous expenses, $700. D. Purchased office supplies on account, $1,350. E. Earned sales commissions, receiving cash, $20,600. F. Paid creditor on account, $750. G. Paid office salaries, $2,600. H. Paid dividends, $4,000. I. Determined that the cost of supplies on hand was $500; therefore, the cost of supplies used was $850.Explanation / Answer
Answer 1. Assets = Liabilities + Stockholders’ Equity Accounts Common Sales Salaries Rent Auto Supplies Miscellaneous Cash + Supplies = Payable + Stock - Dividends + Commisions - Expense - Expense - Expense - Expense - Expense 1. Opened a bank A/c in exchange of common stock =20000 0 0 +20000 0 0 0 0 0 0 0 Balance 20000 0 0 20000 0 0 0 0 0 0 0 2. Paid Rent on office & Equipments -3200 0 0 0 0 0 0 +3200 0 0 0 Balance 16800 0 0 20000 0 0 0 3200 0 0 0 3. Paid Automobile Exp & Misc Exp. -2150 0 0 0 0 0 0 0 +1450 0 +700 Balance 14650 0 0 20000 0 0 0 3200 1450 0 700 4. Purchased Office Supplies 0 +1350 +1350 0 Balance 14650 1350 1350 20000 0 0 0 3200 1450 0 700 5. Earned sales Comm. +20600 0 0 0 0 +20600 0 0 0 0 0 Balance 35250 1350 1350 20000 0 20600 0 3200 1450 0 700 6. Paid Creditor -750 -750 Balance 34500 1350 600 20000 0 20600 0 3200 1450 0 700 7. Paid Office Salaries -2600 +2600 Balance 31900 1350 600 20000 0 20600 2600 3200 1450 0 700 8. Paid Dividends -4000 -4000 Balance 27900 1350 600 20000 -4000 20600 2600 3200 1450 0 700 9. Cost of Supplies Used -850 +850 Balance 27900 500 600 20000 -4000 20600 2600 3200 1450 850 700 Answer 2. a. Income Statement for Slapshot for the M/o June cannot be prepared, since data is provide for Pat Glen (Half Moon Reality) and also for the M/o July, 2016 Income Statement for Half Moon Reality For the M/o July,2016 Particulars Amount % Revenue Sales Comm. Recd 20600 100% Total revenue (A) 20600 Less: Expenses Salaries 2600 12.60% Rent 3200 15.50% Auto 1450 7% Supplies 850 4.10% Miscellaneous 700 3.40% Total Expenses (B) 8800 42.70% Net Income (A-B) 11800 57.30% Answer 2. b. Retained Earning Statement for the month ended 31.07.2016 Particulars Amount Net Profit as per Income statement 11800 Divivdend Paid -4000 Net Profit after Dividend paid 7800 Answer 2. c. Balance Sheet of Half Moon Reality as on 31.07.2016 I. Equity & Libilities 1. Shareholders' Funds Common Stock 20000 Retained Earnings 7800 2. Non-Current Liabilities 0 3. Current Liabilities Accounts Payable 600 Total 28400 II. Assets 1. Non-Current Assets 0 2. Current Assets Cash 27900 Ending Supplies 500 28400 Total 28400
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.