Question

Milea Inc. experienced the following events in Year 1, its first year of operations:

1. Received $16,500 cash from the issue of common stock.
2. Performed services on account for $45,000.
3. Paid the utility expense of $1,250.
4. Collected $32,410 of the accounts receivable.
5. Recorded $7,750 of accrued salaries at the end of the year.
6. Paid a $1,350 cash dividend to the stockholders.

Prepare the statement of changes in stockholders’ equity.

Prepare the balance sheet.
   Prepare the balance sheet.
  

Answer 1

Solution:
	Income Statement
	Revenues :
	Consulting Fees Earned		$                45,000
	Less: Expenses
	Salaries Expenses	$                 7,750
	Utility Expenses	$                 1,250
	Total Expenses		$                  9,000
	Net Income		$                36,000
	Statement of Chages in Stockholder's Equity
		AMOUNT	AMOUNT
	Common Stock:
	Common Stock at Beginning	$                        -
	Add: Issued during the year	$               16,500	$                16,500
	Retained Earnings:
	Beginning Balance	$                        -
	Add: Net Income of the year	$               36,000
	Total	$               36,000
	Less: Dividends	$                 1,350
	Ending balance		$                34,650
	Total of Stockholder's Equity		$                51,150
Solution:
	BALANCE SHEET
	ASSETS	AMOUNT	AMOUNT
	CURRENT ASSETS:
	Cash	$               46,310
	Account Receivable	$               12,590
	Total Current Assets		$                58,900
	FIXED ASSETS:
	Total Of Fixed Assets		$                         -
	TOTAL OF ASSETS		$                58,900
	LIABILITIES & SHAREHOLDER'S EQUITY	AMOUNT	AMOUNT
	CURRENT LIABILITIES:
	Salary Payable	$                 7,750
	Total of Currnet Liabilities		$                  7,750
	Total Liabilities		$                  7,750
	Shareholder's Equity
	Common Stock	$               16,500
	Retained Earnings	$               34,650
	Total Shareholder's Equity		$                51,150
	TOTAL OF LIABILITES & SAHREHOLDER'S EQUITY		$                58,900