Problem Set I

Stephen Collum

ACC 300

6/17/2013

Paulette Mack

P1-3A
On June 1, Beardsley Service Co. was started with an initial investment in the company of $22,100 cash. Here are the assets and liabilities of the company at June 30, and the revenues and expenses for the month of June, its first month of operations:
|Cash |$ 4,600 |Notes payable |$12,000 |
|Accounts receivable |4,000 |Accounts payable |500 |
|Service revenue |7,500 |Supplies expense |1,000 |
|Supplies |2,400 |Maintenance and repairs expense |600 |
|Advertising expense |400 |Utilities expense |300 |
|Equipment |26,000 |Salaries and wages expense |1,400 |

In June, the company issued no additional stock, but paid dividends of $1,400.

Instructions

1. Prepare an income statement and a retained earnings statement for the month of June and a balance sheet at June 30, 2012. 2. Briefly discuss whether the company’s first month of operations was a success.

| |Net income |$3,800 |
| |Ret. earnings |$2,400 |
| |Tot. assets |$37,000 |

Beardsley Service Company
Income Statement
For the Month Ended June 30th

Revenues Service Revenues $7500
Expenses
Salaries and Wages Expense $1400 Supplies Expense $1000 Maintenance & Repairs Expense $600