Problem:
Andover Consulting, Inc. at March 31, 2012, during the year Lori Andover, the only stockholder, bought $10,200 in the business.
1. Identify each as an asset, liability, revenue or expense.
Office Furniture A
Utilities Expense E
A/P L
N/P L
Service Revenue R
A/R A
Supplies Expense E
Rent Expense E
Cash A
Office Supplies A
Salaries Expense E
Salaries Payable L
Property Tax Expense E
Equipment A
2. Prepare and Income Statement for the year ended March 31, 2012
Andover Consulting, Inc.
Income Statement
For the year ending March 31, 2012
Revenue:
Service Revenue $155,000
Expenses:
Utilities 7600
Supplies 3600
Rent 25000
Salaries 51000
Property Tax 3000
Total Expenses 90,200
Net income (loss) 64800
What is the result of operations for 2012?
Net Income of 64800
3. Assuming the balance in retained earnings on March 31, 2012 was $34,800 what was the amount of dividends during the year? Prepare a statement of retained earnings to solve for the dividends. The business has no beginning balance for retained earnings.
Andover Consulting, Inc.
Retained Earnings
For the Year Ending March 31, 2012
Retained earnings, March 31, 2012 24600
Add: Net Income 64800
89400
Less: Dividends 54800 (?)
Retained earnings, March 31, 2012 34600