Prepare a retained earnings statement

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Reference no: EM131527192

Question: After its second year of operations, the following amounts were taken from the accounting records of Rainbow Consulting Services, Inc., as of July 31, 2008. Rainbow Consulting Services began its operations on August 1, 2006.

Capital stock $ 40,000

Cash ?

Dividends 40,000

Fees earned 578,000

Interest expense 12,000

Land 342,000

Miscellaneous expense 16,000

Notes payable 100,000

Rent expense 80,000

Salaries expense 180,000

Taxes expense 40,000

Utilities expense 90,000

Instructions

1. Prepare an income statement for the year ending July 31, 2008.

2. Prepare a retained earnings statement for the year ending July 31, 2008. (Note: The retained earnings at August 1, 2007, was $230,000.)

3. Prepare a balance sheet as of July 31, 2008.

4. Prepare a statement of cash flows for the year ending July 31, 2008.

Reference no: EM131527192

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