Response to the following problem:
Financial information related to Oak Tree Interiors for October and November 2012 is as follows:
|
|
October 31, 2012
|
November 30, 2012
|
|
Accounts payable
|
$ 40,000
|
$ 65,000
|
|
Accounts receivable
|
75,000
|
118,000
|
|
Capital stock
|
60,000
|
60,000
|
|
Retained earnings
|
?
|
?
|
|
Cash
|
110,000
|
140,000
|
|
Supplies
|
15,000
|
20,000
|
a. Prepare balance sheets for Oak Tree Interiors as of October 31 and as of November 30, 2012.
b. Determine the amount of net income for November, assuming that no additional capital stock was issued and no dividends were paid during the month.
c. Determine the amount of net income for November, assuming that no additional capital stock was issued but dividends of $20,000 were paid during the month.