In December 2012, Milly Newton opened an organic dry-cleaning shop. The financial statement effects template below shows transactions for the month (a through i) and accounting adjustments (i through iv).
Required:
a. Prepare trial balance for December 31, 2012.
b. Prepare an income statement for Milly Newton’s first month of operations.
c. Prepare a balance sheet for December 31, 2012.
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Balance Sheet
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Income Statement
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|
Transaction
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Cash Asset
|
+
|
Noncash Assets
|
=
|
Liabil-
ities
|
+
|
Contrib. Capital
|
+
|
Earned
Capital
|
Rev-enues
|
–
|
Expen-ses
|
=
|
Net
Income
|
| |
+12,000
|
|
+72,000
(Equipment)
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=
|
|
|
+84,000
(Common
Stock)
|
|
|
|
–
|
|
=
|
|
| |
-2,760
|
|
+2,400
(Supplies)
|
=
|
|
|
|
|
-360
Retained
Earnings)
|
|
–
|
+360
(Phone
Expense)
|
=
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-360
|
| |
|
|
+4,600
(Equipment)
|
=
|
+4,600
AP)
|
|
|
|
|
|
–
|
|
=
|
|
| |
+800
|
|
|
=
|
|
|
|
|
+800
(Retained
Earnings)
|
+800
(Sales)
|
–
|
|
=
|
+800
|
| |
+530
|
|
|
=
|
+530
(Unearned Revenue)
|
|
|
|
|
|
–
|
|
=
|
|
| |
-4,000
|
|
+4,000
(Equipment)
|
=
|
|
|
|
|
|
|
–
|
|
=
|
|
| |
-3,000
|
|
|
=
|
|
|
|
|
-3,000
(Retained
Earnings)
|
|
–
|
+3,000
(Wages
Exp.)
|
=
|
-3,000
|
| |
+5,300
|
|
|
=
|
|
|
|
|
+5,300
(Retained
Earnings)
|
+5,300
(Sales)
|
–
|
|
=
|
+5,300
|
| |
-4,200
|
|
|
=
|
-4,200
(AP)
|
|
|
|
|
|
–
|
|
=
|
|
| |
|
|
-1,600
(Supplies)
|
=
|
|
|
|
|
-1,600
(Retained Earnings)
|
|
–
|
+1,600
(Supplies Exp.)
|
=
|
1,600
|
| |
|
|
-2,000
(Equipment)
|
=
|
|
|
|
|
-2,000
(Retained Earnings)
|
|
–
|
+2,000
(Depr’n Exp.)
|
=
|
-2,000
|
| |
|
|
|
=
|
+100
(Wages Payable)
|
|
|
|
-100
(Retained Earnings)
|
|
–
|
+100
(Wages Exp.)
|
=
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-100
|
| |
|
|
|
=
|
+1,200
(Rent Payable)
|
|
|
|
-1,200
(Retained Earnings)
|
|
–
|
+1,200
(Rent Exp.)
|
=
|
-1,200
|