acct 201 test 1

On October 1, Keisha King organized Real Answers, a new consulting firm; on October 3, the owner contributed $84,000 cash. On October 31, the company’s records show the following items and amounts.

Cash
$
11,360 Cash dividends
$
2,000 Accounts receivable 14,000 Consulting fees earned 14,000 Office supplies 3,250 Rent expense 3,550 Land 46,000 Salaries expense 7,000 Office equipment 18,000 Telephone expense 760 Accounts payable 8,500 Miscellaneous expenses 580 Common stock 84,000

Also assume the following: a.
The owner’s initial investment consists of $38,000 cash and $46,000 in land in exchange for its common stock.
b.
The company’s $18,000 equipment purchase is paid in cash.
c.
The accounts payable balance of $8,500 consists of the $3,250 office supplies purchase and $5,250 in employee salaries yet to be paid.
d.
The company’s rent, telephone, and miscellaneous expenses are paid in cash.
e.
No cash has been collected on the $14,000 consulting fees earned. Income ststement

REAL ANSWERS
Income Statement
For Month Ended October 31
Revenues
Consulting fees earned
$14,000

0

0

Total revenues
$14,000
Expenses
Rent expense
(3,550)

Salaries expense
(7,000)

Telephone expense
(760)

Miscellaneous expenses
(580)

0

0

Total expenses

(11,890)
Net income

$2,110

Statement of retained earnings

REAL ANSWERS
Statement of Retained Earnings
For Month Ended October 31
Retained earnings, October 1
$0
Add: Net income
2,110

2,110
Less: Dividends
2,000
Retained earnings, October 31
$110

Balance sheet

REAL ANSWERS
Balance Sheet
October 31
Assets
Liabilities
Cash
$11,360
Accounts payable
$8,500
Accounts receivable
14,000

0
Office supplies
3,250
Total liabilities
8,500
Land
46,000
Equity
Office equipment
18,000
Common stock
84,000

0
Retained earnings
110
Total assets
$92,610
Total liabilities and equity
$92,610

Using the above information prepare an October 31