At the beginning of 2016, Oak Consulting had the following normal balances In Ii

Question

At the beginning of 2016, Oak Consulting had the following normal balances In Iits accounts: Account Cash Balance $42,000 Accounts recelvable 25,000 Accounts payable Common stock Retained earnings 8,400 payable24.000 24,000 34,600 The following events apply to Oak's Consulting for 2016: Oak's Consuting for 2016 1. Provided $185,000 of services on account. 2. Incurred $45,800 of operating expenses on account 3. Collected $140,000 of accounts recelvable 3. Collected $4 4. Pald $120,000 cash for salarles expense. 5. Pald $31,400 cash as a partial payment on accounts payable. 6. Pald an $10,000 cash dividend to the stockholders.

Explanation / Answer

b) T accounts

d-2 Net Income is 19200 ( refer closing entry 1 in d-1)

net change in Retained earnings = Net Income -Dividends declared

= 19200 - 10000 , = 9200

Accounts Payable Cash 31400 8400 Beginning Balance 45800 Operating Expense 31400 54200 22800 Ending balance Cash Beginnning Balance 42000 120000 Salaries Expense Accounts Receivables 140000 31400 Accounts payable 10000 Dividends 182000 161400 Ending Balance 20600 Accounts Receivables Beginnning Balance 25000 140000 Cash Service Revenue 185000 210000 140000 Ending Balance 70000 Common Stock 24000 Beginnning Balance 24000 Ending Balance Retained Earnings 34600 Beginnning Balance 34600 Ending Balance Dividends Beginnning Balance 0 Cash 10000 Ending Balance 10000 Service Revenue 0 Beginnning Balance 185000 Accounts Receivables 185000 Ending Balance Operating Expenses Beginnning Balance 0 Accounts Payable 45800 Ending Balance 45800 Salaries Expense Beginnning Balance 0 Cash 120000 Ending Balance 120000

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