Reference no: EM133111296
Question - Sweet Treats Corporation had the following opening trial balance at the beginning of its fiscal year, October 1, 2020. The company adjusts its accounts monthly.
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Debits
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Credits
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Cash
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$5,150
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|
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Accounts receivable
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7,300
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|
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Supplies
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1,950
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|
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Equipment
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18,000
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Accumulated depreciation
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$6,000
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Unearned revenue
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3,250
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Common shares
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8,000
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Retained earnings
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15,150
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Totals
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$32,400
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$32,400
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During the month of October, the following selected transactions took place:
October 1: Borrowed $10,000 from the bank for one year at an interest rate of 7%. Interest is due on the first day of each following month, beginning November 1.
October 2: Paid $3,500 for two months' rent in advance for October and November.
October 7: Purchased $500 supplies on account. Supplies on hand at October 31 were $650.
October 13: Performed services on account, $12,300.
October 14: Collected half of the outstanding accounts receivable.
October 15: Paid salaries, $3,600.
October 21: Received $2,800 from a customer for services to be performed in November.
October 25: Declared and paid a dividend, $400.
October 28: Performed $3,100 of services for a customer on account.
October 31: The company owed $1,800 of salaries to its employees for the month just ended.
October 31: The company earned $4,100 of revenue that had been received in advance.
October 31: The equipment has a six-year useful life and uses the straight-line method.
October 31: The company performed $750 of services for a client that it had not billed or recorded.
Required -
1. Prepare an income statement for the month ending October 31, 2020. Keep all decimals when performing your calculations.
2. In the box below. Type in the net income/loss you calculated in your income statement. Round your answer to the nearest whole number.