Select your language

Suggested languages for you:
Log In Start studying!
Answers without the blur. Just sign up for free and you're in → Illustration

Q9SB_2

Expert-verified
Financial & Managerial Accounting
Found in: Page 45
Financial & Managerial Accounting

Financial & Managerial Accounting

Book edition 7th
Author(s) John J Wild, Ken W. Shaw, Barbara Chiappetta
Pages 1096 pages
ISBN 9781259726705

Short Answer

Rivera Roofing Company, owned by Reyna Rivera, began operations in July and completed these transactions during that first month of operations.

July 1 Reyna Rivera invested $80,000 cash in the company in exchange for its common stock.

2 The company rented office space and paid $700 cash for the July rent.

3 The company purchased roofing equipment for $5,000 by paying $1,000 cash and agreeing to pay the $4,000 balance in 30 days.

6 The company purchased office supplies for $600 cash.

8 The company completed work for a customer and immediately collected $7,600 cash for the work.

10 The company purchased $2,300 of office equipment on credit.

15 The company completed work for a customer on credit in the amount of $8,200.

17 The company purchased $3,100 of office supplies on credit.

23 The company paid $2,300 cash for the office equipment purchased on July 10.

25 The company billed a customer $5,000 for work completed; the balance is due in 30 days.

28 The company received $8,200 cash for the work completed on July 15.

30 The company paid an assistant’s salary of $1,560 cash for this month.

31 The company paid $295 cash for this month’s utility bill.

31 The company paid $1,800 cash in dividends to the owner (sole shareholder).

Required 2. Prepare the income statement and the statement of retained earnings for the month of July, and the balance sheet as of July 31

The net income is $18,245, closing retained earnings is $16,445 and the total of the balance sheet is $103,545.

See the step by step solution

Step by Step Solution

Definition of Rent Expense

Rivera Roofing Company

Income Statement

For the month ended July 31

Amount ($)

Amount ($)

Service Revenue

20,800

Expenses

Rent expense

700

Salary Expense

1,560

Utility expense

295

Total expense

2,555

Net Income

18,245

Preparation of Statement of retained earnings

Rivera Roofing Company

Income Statement

For the month ended July 31

Amount ($)

Opening Retained Earnings

0

Add: Net Income

18,245

18,245

Less: Dividends

-1,800

Closing Retained Earnings

16,445

Preparation of Balance Sheet 

Rivera Roofing Company

Balance Sheet

For the month ended July 31

Assets

Amount ($)

Liability

Amount ($)

Cash

87,345

Accounts Payable

7,100

Accounts Receivables

5,000

Office Supplies

3,700

Equity

Office Equipment

2,300

Common stock

80,000

Roofing Equipment

5,000

Retained Earnings

16,445

Total assets

103,545

Total liabilities and equity

103,545

Most popular questions for Business-studies Textbooks

Gabi Gram started The Gram Co., a new business that began operations on May 1. The Gram Co. completed the following transactions during its first month of operations.

May 1 G. Gram invested $40,000 cash in the company in exchange for its common stock.

1 The company rented a furnished office and paid $2,200 cash for May’s rent.

3 The company purchased $1,890 of office equipment on credit.

5 The company paid $750 cash for this month’s cleaning services.

8 The company provided consulting services for a client and immediately collected $5,400 cash.

12 The company provided $2,500 of consulting services for a client on credit.

15 The company paid $750 cash for an assistant’s salary for the first half of this month.

20 The company received $2,500 cash payment for the services provided on May 12.

22 The company provided $3,200 of consulting services on credit.

25 The company received $3,200 cash payment for the services provided on May 22.

26 The company paid $1,890 cash for the office equipment purchased on May 3.

27 The company purchased $80 of advertising in this month’s (May) local paper on credit; cash payment is due June 1.

28 The company paid $750 cash for an assistant’s salary for the second half of this month.

30 The company paid $300 cash for this month’s telephone bill.

30 The company paid $280 cash for this month’s utilities.

31 The company paid $1,400 cash in dividends to the owner (sole shareholder).

Required 2. Prepare the income statement and the statement of retained earnings for the month of May, and the balance sheet as of May 31

Icon

Want to see more solutions like these?

Sign up for free to discover our expert answers
Get Started - It’s free

Recommended explanations on Business-studies Textbooks

94% of StudySmarter users get better grades.

Sign up for free
94% of StudySmarter users get better grades.