Seth Feye established Reliance Financial Services on July 1, 2016. Reliance Financial Services offers financial planning advice to its clients. The effect of each transaction and the balances after each transaction for July follow: Assets =Liabilities + Stockholders’ Equity
Accounts Accounts Common Fees Salaries Rent Auto Supplies Misc.
Cash Receivable + Supplies = Payable + Stock - Dividends + Earned - Expense - Expense - Expense - Expense - Expense
a. +50,000 +50,000
b. +7,000 +7,000
Bal. 50,000 7,000 7,000 50,000
c. -3,600 -3,600
Bal. 46,400 7,000 3,400 50,000
d. +110,000 +110,000
Bal. 156,400 7,000 3,400 50,000 110,000
e. -33,000 -33,000
Bal. 123,400 7,000 3,400 50,000 110,000 -33,000
f. -20,800 -16,000 -4,800
Bal. 102,600 7,000 3,400 50,000 110,000 -33,000 -16,000 -4,800
g. -55,000 -55,000
Bal. 47,600 7,000 3,400 50,000 110,000 -55,000 -33,000 -16,000 -4,800
h. -4,500 -4,500
Bal. 47,600 2,500 3,400 50,000 110,000 -55,000 -33,000 -16,000 -4,500 -4,800
i. +34,500 +34,500
Bal. 47,600 34,500 2,500 3,400 50,000 144,500 -55,000 -33,000 -16,000 -4,500 -4,800
j. -15,000 -15,000
Bal. 32,600 34,500 2,500 3,400 50,000 -15,000 144,500 -55,000 -33,000 -16,000 -4,500 -4,800
Required:
1. Prepare anincome statement for the month ended July 31, 2016. Refer to the lists ofAccounts in the information given, Labels, and Amount Descriptions for the exact wording of the answer choices for text entries. Be sure to complete the statement heading. If there is a net loss, enter that amount as a negative number using a minus sign. You will not need to enter colons (:) on the income statement.
2. Prepare aretained earnings statement for the month ended July 31, 2016. Refer to the lists ofAccounts in the information given, Labels, and Amount Descriptions for the exact wording of the answer choices for text entries. Be sure to complete the statement heading. "The word "Less" or "Add" is not needed in the Retained Earnings Statement. Enter all amounts as positive numbers.
3. Prepare abalance sheet as of July 31, 2016. Refer to the lists ofAccounts in the information given, Labels, and Amount Descriptions for the exact wording of the answer choices for text entries. Be sure to complete the statement heading.
4. Prepare astatement of cash flows for the month ending July 31, 2016. Refer to the lists ofAccounts in the information given, Labels, and Amount Descriptions for the exact wording of the answer choices for text entries. Be sure to complete the statement heading. Enter amounts that represent cash outflows as a negative number using a minus sign. You will not need to enter colons (:) or the wordDeduct on the financial statements.