Prepare an income statement for milly newtons

Assignment Help Accounting Basics

Reference no: EM131025025

In December 2012, Milly Newton opened an organic dry-cleaning shop. The financial statement effects template below shows transactions for the month (a through i) and accounting adjustments (i through iv).

Required:

a. Prepare trial balance for December 31, 2012.

b. Prepare an income statement for Milly Newton’s first month of operations.

c. Prepare a balance sheet for December 31, 2012.

Balance Sheet

Income Statement

Transaction

Cash Asset

Noncash Assets

Liabil-

ities

Contrib. Capital

Earned

Capital

Rev-enues

–

Expen-ses

Net

Income

+12,000

+72,000

(Equipment)

+84,000

(Common

Stock)

–

-2,760

+2,400

(Supplies)

-360

Retained

Earnings)

–

+360

(Phone

Expense)

-360

+4,600

(Equipment)

+4,600

AP)

–

+800

(Retained

Earnings)

+800

(Sales)

–

+800

+530

(Unearned Revenue)

–

-4,000

+4,000

(Equipment)

–

-3,000

(Retained

Earnings)

–

+3,000
(Wages

Exp.)

-3,000

+5,300

(Retained

Earnings)

+5,300

(Sales)

–

+5,300

-4,200

(AP)

–

-1,600

(Supplies)

-1,600

(Retained Earnings)

–

+1,600
(Supplies Exp.)

1,600

-2,000

(Equipment)

-2,000

(Retained Earnings)

–

+2,000
(Depr’n Exp.)

-2,000

+100

(Wages Payable)

-100

(Retained Earnings)

–

+100

(Wages Exp.)

-100

+1,200

(Rent Payable)

-1,200

(Retained Earnings)

–

+1,200
(Rent Exp.)

-1,200

Reference no: EM131025025

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