Question - Stonyfield Farm had the following transactions during its first month of operations:
June 1 - The Company received cash of $35,000 and issued common stock to the shareholders.
June 2 - Borrowed $20,000 from the bank and signed a long-term note payable.
June 8 - Purchased equipment with a short-term note Payable for $10,000.
June 9 - Performed services billed at $3,000 and received cash of $3,000.
June 10 - Performed services for a client on account, $6,500.
June 12 - Employees worked two weeks and were paid salaries of $1,000.
June 15 - Paid the short-term note payable from the June 8 purchase.
June 22 - Purchased office supplies on account for $7,000.
June 30 - Paid amount due for office supplies.
June 30 - Paid June's monthly rent of $500.
June 30 - Paid the monthly income taxes of $2,200.
June 30 - The Board of Directors declared and paid dividends of $1,000.
Required:
1. Journalize the entries. Omit the explanations. Be sure to set them as explained in class.
2. Prepare a single-step income statement for the first month of operations. Include a proper heading.
3. Prepare a statement of retained earnings for the first month of operations. Include a proper heading.