P1-3A and P1-5A – Full Solution in EXCEL

P1-3A
Prepare an income statement, retained earnings statement, and balance sheet;
discuss results.

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

P3-5A Towne Architects incorporated as
licensed architects on April 1, 2012. During the first month of the operation
of the business, these events and transactions occurred:

Apr. 1
Stockholders invested
$18,000 cash in exchange for common stock of the corporation.

Apr. 1
Hired a
secretary-receptionist at a salary of $375 per week, payable monthly.

Apr. 2
Paid office rent for the
month $900.

Apr. 3
Purchased architectural
supplies on account from Spring Green Company $1,300.

Apr. 10
Completed blueprints on a
carport and billed client $1,900 for services.

Apr. 11
Received $700 cash
advance from J. Madison to design a new home.

Apr. 20
Received $2,800 cash for
services completed and delivered to M. Svetlana.

Apr. 30
Paid
secretary-receptionist for the month $1,500.

Apr. 30
Paid $300 to Spring Green
Company for accounts payable due.

The company uses these accounts: Cash, Accounts Receivable,
Supplies, Accounts Payable, Unearned Service Revenue, Common Stock, Service
Revenue, Salaries and Wages Expense, and Rent Expense.

(a) Prepare an income
statement and a retained earnings statement for the month of June and a
balance sheet at June 30, 2012.
(b)
Briefly discuss whether the company’s first month of operations was a
success.
(c)
Discuss the company’s decision to distribute a dividend.