Question: After its second year of operations, the following amounts were taken from the accounting records of Rainbow Consulting Services, Inc., as of July 31, 2008. Rainbow Consulting Services began its operations on August 1, 2006.
Capital stock $ 40,000
Cash ?
Dividends 40,000
Fees earned 578,000
Interest expense 12,000
Land 342,000
Miscellaneous expense 16,000
Notes payable 100,000
Rent expense 80,000
Salaries expense 180,000
Taxes expense 40,000
Utilities expense 90,000
Instructions
1. Prepare an income statement for the year ending July 31, 2008.
2. Prepare a retained earnings statement for the year ending July 31, 2008. (Note: The retained earnings at August 1, 2007, was $230,000.)
3. Prepare a balance sheet as of July 31, 2008.
4. Prepare a statement of cash flows for the year ending July 31, 2008.