History Bookmarks Window Help On June 1, Cindy Godfrey started Divine Designs Co

Question

History Bookmarks Window Help On June 1, Cindy Godfrey started Divine Designs Co., a company that provides craft opportunities, by investing $12,000 cash in the business. Following are the assets and liabilities of the company at June 30 and the revenues and expenses for the month of June. Cash Accounts Receivable Supplies $10,150 Service Revenue 2,800 Advertising Expense 2,000 Rent Expense 10,000 Gasoline Expense 9,000 Utilities Expense 1,200 $6,500 500 1,600 200 150 Notes Payable Accounts Payable Cindy made no additional investment in June but withdrew $1,300 in cash fort personal use during the month. Prepare an income statement for the month of June. DIVINE DESIGNS co. Income Statement Prepare an owner's equity statement for the month of June. (List items that increase owner's equity first.) MacBook Pro FS F8 F1O

Explanation / Answer

INCOME STATEMENT Revenues: Service revenue 6500 Less: Operating expense Advertising expense 500 Rent expense 1600 Gasoline expense 200 Utilities expense 150 Total operating expense 2450 Net income for the year 4050 OWNERS EQUITY STATEMENT Beginning capital 12000 Add: Net income for the year 4050 4050 16050 Less: Withdrawals 1300 Ending Capital 14750 BALANCE SHEET Assets; Cash 10150 Accounts recievable 2800 Supplies 2000 Equipment 10000 Total assets 24950 Liabilities: Accounts payable 1200 Notes payable 9000 Total Liabilities 10200 Owners Equity Ending capital 14750 Total Liabilities and Owners equity 24950 REVISED INCOME STATEMENT Revenues: Service revenue 7400 Less: Operating expense Advertising expense 500 Rent expense 1600 Gasoline expense 350 Utilities expense 150 Total operating expense 2600 Net income for the year 4800 REVISED OWNERS EQUITY STATEMENT Beginning capital 12000 Add: Net income for the year 4800 4800 16800 Less: Withdrawals 1300 Ending Capital 15500

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