Question

At September 30, 2019 Mast Corporation reported the following unadjusted amounts for its accounts, each of which is considered to be a normal account balance.

              

Accounts Payable	$12,000
Accounts Receivable	1,000
Advertising Expense	400
Cash	84,000
Common Stock Dividends	64,000 1,000
Equipment	60,000
Note Payable	36,000
Service Revenue	42,000
Retained Earnings	24,800
Supplies	1,400
Supplies Expense	600
Utilities Expense	2,000
Salaries and Wages Expense	28,400

During September, the following occurred:

1. Investors purchased 2,000 shares of stock for $5 per share.

2. A customer received consulting services for $7,000 and will pay this amount in full next month

3. The electricity bill for September arrived for $400 and was immediately paid in full.

Required:

1. Journalize transactions 1-3 if applicable

2. Prepare an Unadjusted Trial Balance (update balances with the transactions from 1.)

3. Prepare an Income Statement for September 30

4. Prepare a Statement of Retained Earnings for September 30

5. Prepare a Classified Balance Sheet for September 30

Answer 1

1.

Adjustment Entry ($)

2. Adjsuted Trial Balance($) :

3.

Income Statement ($)

Service Revenue	49,000
Less:
Supplies Expense	600
Utilities Expense	2,000
Salaries	28,400
Electricity Expense	400
Advertising Expense	400
Net Income	17,200

4.

Statement of Retained Earnings ($)

Opening Balance	24,800
Add: Net Income	17,200
Less: Dividend	1,000
Closing Balance	41,000

5.

Balance Sheet ($)

Assets:
Accounts Receivable	8,000
Cash	93,600
Equipment	60,000
Supplies	1,400
Total	163,000
Accounts Payable	12,000
Notes Payable	36,000
Common Stock	74,000
Retained Earnings	41,000
Total	163,000