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Horngren'S Financial And Managerial Accounting
Found in: Page 46

Short Answer

Allen Shonton recently opened his own accounting firm on April 1, which he operates as a corporation. The name of the new entity is Allen Shonton, CPA. Shonton experienced the following events during the organizing phase of the new business and its first month of operations in 2018: Apr. 5 Shonton deposited $75,000 in a new business bank account titled Allen Shonton, CPA. The business issued common stock to Shonton. 6 Paid $300 cash for letterhead stationery for new office. 7 Purchased office furniture for the office on account, $9,500. 10 Consulted with tax client and received $4,000 for services rendered. 11 Paid utilities, $190. 12 Finished tax hearings on behalf of a client and submitted a bill for accounting services, $20,000. 18 Paid office rent, $750. 25 Received amount due from client that was billed on April 12. 27 Paid full amount of accounts payable created on April 7. 30 Cash dividends of $3,500 were paid to stockholders. Requirements 2. Prepare the following financial statements: c. Balance sheet

In the balance sheet, total assets equals $94,560, total liabilities equals $0, and total stockholders’ equity equals $94,560.

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Step by Step Solution

Explanation on Balance Sheet

Balance sheet represents the ending balances of assets, liabilities, and owners’ equity of a corporation at the end of a particular accounting period.

Details of balance sheet

Allen Shonton, CPA. Shonton

Balance Sheet

April 30, 2018

Assets

Liabilities

Cash

$84,760

Accounts Payable

$0

Letterhead Stationary

300

Office Furniture

9,500

Stockholders’ Equity

Common Stock

75,000

Retained Earnings

19,560

Total Stockholders’ Equity

$94,560

Total Assets

$94,560

Total Liabilities and Stockholders’ Equity

$94,560

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