Principles of Accounting 1 Chapter 1 Problem 2 Homework LeBron James established
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Question
Principles of Accounting 1
Chapter 1 Problem 2 Homework
LeBron James established Get Skills Services on June 1, 2015. Get Skills Services offers basketball training camps to its clients. The effect of each transaction and the balances after each transaction for June are shown below.
Cash
+Accounts Receivable
+Supplies
+Building
+Accounts Payable
+Capital Stock
-Dividends
+Fees Earned
-Supplies Expense
-Rent Expense
-Misc. Expense
A.
+120,000
+120,000
Bal.
120,000
120,000
B.
+14,000
+14,000
Bal
120,000
14,000
14,000
120,000
C.
-100,000
+100,000
Bal
20,000
14,000
100,000
14,000
120,000
D.
+45,000
+45,000
Bal
20,000
45,000
14,000
100,000
14,000
120,000
45,000
E.
-10,000
-10,000
Bal
10,000
45,000
14,000
100,000
14,000
120,000
45,000
-10,000
F.
-3,000
-3,000
Bal
7,000
45,000
14,000
100,000
14,000
120,000
45,000
-10,000
-3,000
G.
+40,000
-40,000
Bal
47,000
5,000
14,000
100,000
14,000
120,000
45,000
-10,000
-3,000
H.
-12,000
-12,000
Bal
35,000
5,000
14,000
100,000
2,000
120,000
45,000
-10,000
-3,000
I.
-8,000
-8,000
Bal
35,000
5,000
6,000
100,000
2,000
120,000
45,000
-8,000
-10,000
-3,000
J.
+65,000
+65,000
Bal
100,000
5,000
6,000
100,000
2,000
120,000
110,000
-8,000
-10,000
-3,000
K.
-7,500
-7,500
Bal
92,500
5,000
6,000
100,000
2,000
120,000
-7,500
110,000
-8,000
-10,000
-3,000
Instructions
1. Prepare an income statement for the month ended June 30, 2015.
2. Prepare a retained earnings statement for the month ended June 30, 2015.
3. Prepare a balance sheet as of June 30, 2015.
Principles of Accounting 1
Chapter 1 Problem 1 Homework
On April 1 of the current year, Bret Michaels established a business to manage recording artists. He completed the following transactions during March:
a. Opened a business bank account with a deposit of $40,000 in exchange for capital stock.
b. Paid rent expense for the month, $1,900.
c. Purchased office supplies using cash, $4,000.
d. Received cash from sales commissions earned for managing recording artists, $8,000.
e. Purchased office equipment on account, $5,000.
f. Billed customers for sales commission earned, $15,500.
g. Paid office salaries, $7,200.
h. Determined that the cost of supplies on hand was $1,600; therefore, the cost of supplies used was $2,400.
i. Paid creditors on account, $4,000.
j. Received $10,000 cash from customers on account.
k. Paid dividends, $1,700.
Instructions
1. Create an excel spreadsheet as demonstrated in the example problem. Be sure to use the appropriate account titles and place them in the proper order.
Hint: (Assets-Cash, Accounts Receivable, Supplies, Office Equipment; Liabilities-Accounts Payable; Stockholders’ Equity-Capital Stock, Dividends, Sales Commissions or Fees Earned, Rent Expense, Salaries Expense, Supplies Expense)
2. Calculate the amount of net income for March.
3. Calculate the net change in Retained Earnings for the month of April.
Cash
+Accounts Receivable
+Supplies
+Building
+Accounts Payable
+Capital Stock
-Dividends
+Fees Earned
-Supplies Expense
-Rent Expense
-Misc. Expense
A.
+120,000
+120,000
Bal.
120,000
120,000
B.
+14,000
+14,000
Bal
120,000
14,000
14,000
120,000
C.
-100,000
+100,000
Bal
20,000
14,000
100,000
14,000
120,000
D.
+45,000
+45,000
Bal
20,000
45,000
14,000
100,000
14,000
120,000
45,000
E.
-10,000
-10,000
Bal
10,000
45,000
14,000
100,000
14,000
120,000
45,000
-10,000
F.
-3,000
-3,000
Bal
7,000
45,000
14,000
100,000
14,000
120,000
45,000
-10,000
-3,000
G.
+40,000
-40,000
Bal
47,000
5,000
14,000
100,000
14,000
120,000
45,000
-10,000
-3,000
H.
-12,000
-12,000
Bal
35,000
5,000
14,000
100,000
2,000
120,000
45,000
-10,000
-3,000
I.
-8,000
-8,000
Bal
35,000
5,000
6,000
100,000
2,000
120,000
45,000
-8,000
-10,000
-3,000
J.
+65,000
+65,000
Bal
100,000
5,000
6,000
100,000
2,000
120,000
110,000
-8,000
-10,000
-3,000
K.
-7,500
-7,500
Bal
92,500
5,000
6,000
100,000
2,000
120,000
-7,500
110,000
-8,000
-10,000
-3,000
Explanation / Answer
Income statement, Retained earning statement and Balance sheet is prepared as under:
1. Income statement
2.
Retained earning statement
3.
Balance sheet
Get Skills Services Income statement For the Year Ended June 30'2015 Particulars Amount ($) Amount ($) Fees Earned 1,10,000 Less: Supplies Expense 8,000 Rent Expense 10,000 Miscellaneous Administrative Expense 3,000 Total expenses 21,000 Net Income 89,000Related Questions
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