Kelly Pitney began her consulting business, Kelly Consulting, on April 1, 2016.D
ID: 2468035 • Letter: K
Question
Kelly Pitney began her consulting business, Kelly Consulting, on April 1, 2016.During May, Kelly Consulting entered into the following transactions:
May 3. Received cash from clients as an advance payment for services to be provided and recorded it as unearned fees, $4,500.
5. Received cash from clients on account, $2,450.
9. Paid cash for a newspaper advertisement, $225.
13. Paid Office Station Co. for part of the debt incurred on April 5, $640.
15. Recorded services provided on account for the period May 1-15, $9,180.
16. Paid part-time receptionist for two weeks’ salary including the amount owed on April 30, $750.
17. Recorded cash from cash clients for fees earned during the period May 1-16, $8,360.
20. Purchased supplies on account, $735.
21. Recorded services provided on account for the period May 16-20, $4,820.
25. Recorded cash from cash clients for fees earned for the period May 17-23, $7,900.
27. Received cash from clients on account, $9,520.
28. Paid part-time receptionist for two-weeks salary, $750.
30. Paid telephone bill for May, $260.
31. Paid electricity bill for May, $810. 31. Recorded cash from cash clients for fees earned for the period May 26-31, $3,300. 31. Recorded services provided on account for the remainder of May, $2,650. 31. Kelly withdrew $10,500 for personal use.
Question ===>>>> Prepare a income statement, retained earning statement, and balance sheet
Explanation / Answer
Income statement:
Services income(2450 +9180 + 8360+4820 + 7900 + 3300 + 2650) $38660
less: Newspaper advertising expense $225
less: salary expense ( 750 + 750) $1500
less: telephone bills 260
less: electricity bills 810
Net income $35865
Statement of retained earning:
Opening retained earning balance $0
add: Net income $35865
less: Dividend 0
Ending retained earning balance $35865
Balance sheet (EXTRACT Balance sheet - Balance wil not tally becasue April end balancs are not given)
Assets
Current assets
cash(4500+2450 -225-640 -750+8360 + 7900 + 9520 - 750-260 -810 + 3300 -10500) 22096
Accounts receivable(9180 -9520 + 2650) 2310
Supplies 735
Total Assets 25141
Total liabilities and equity
current liabilities
Unearned fees 4500
Accounts payable 735
Equity
Retained earning 35865
less: Drawing $10500 25365
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