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P1-3B Shaw's Garden was started on May 1 with an investment of $45,000 cash. Follow- ng are the assets, liabilities, and common stock of the company on May 31, 2014, and the revenues and expenses for the month of May, its first month of operations. Prepare an income stateme retained earnings statemen and balance sheet; discuss results. Accounts receivable Service revenue Advertising expense Accounts payable $ 8,400 10,400 1,800 4,400 10,800 45,000 Notes payable Salaries and wages expense (LO 4, 5), AP Equipment Maintenance and repairs expense Insurance expense $26,000 1,900 58,800 2,100 400 Cash Common stock No additional common stock was issued in May, but a dividend of $1,600 in cash was paid. Instructions (a) Prepare an income statement and a retained earnings statement for the month of May and a balance sheet at May 31, 2014. (b) Briefly discuss whether the company's first month of operations was a success. (c) Discuss the company's decision to distribute a dividend. (a) Net income Ret. eamings Tot assets $ 4,200 $ 2,600 $78,000

P1-3B Shaw's Garden was started on May 1 with an investment of $45,000 cash. Follow- ng are the assets, liabilities, and common stock of the company on May 31, 2014, and the revenues and expenses for the month of May, its first month of operations. Prepare an income stateme retained earnings statemen and balance sheet; discuss results. Accounts receivable Service revenue Advertising expense Accounts payable $ 8,400 10,400 1,800 4,400 10,800 45,000 Notes payable Salaries and wages expense (LO 4, 5), AP Equipment Maintenance and repairs expense Insurance expense $26,000 1,900 58,800 2,100 400 Cash Common stock No additional common stock was issued in May, but a dividend of $1,600 in cash was paid. Instructions (a) Prepare an income statement and a retained earnings statement for the month of May and a balance sheet at May 31, 2014. (b) Briefly discuss whether the company's first month of operations was a success. (c) Discuss the company's decision to distribute a dividend. (a) Net income Ret. eamings Tot assets $ 4,200 $ 2,600 $78,000

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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p1-3b
P1-3B Shaw's Garden was started on May 1 with an investment of $45,000 cash. Follow- ng are the assets, liabilities, and common stock of the company on May 31, 2014, and the revenues and expenses for the month of May, its first month of operations. Prepare an income stateme retained earnings statemen and balance sheet; discuss results. Accounts receivable Service revenue Advertising expense Accounts payable $ 8,400 10,400 1,800 4,400 10,800 45,000 Notes payable Salaries and wages expense (LO 4, 5), AP Equipment Maintenance and repairs expense Insurance expense $26,000 1,900 58,800 2,100 400 Cash Common stock No additional common stock was issued in May, but a dividend of $1,600 in cash was paid. Instructions (a) Prepare an income statement and a retained earnings statement for the month of May and a balance sheet at May 31, 2014. (b) Briefly discuss whether the company's first month of operations was a success. (c) Discuss the company's decision to distribute a dividend. (a) Net income Ret. eamings Tot assets $ 4,200 $ 2,600 $78,000
Transcribed Image Text:P1-3B Shaw's Garden was started on May 1 with an investment of $45,000 cash. Follow- ng are the assets, liabilities, and common stock of the company on May 31, 2014, and the revenues and expenses for the month of May, its first month of operations. Prepare an income stateme retained earnings statemen and balance sheet; discuss results. Accounts receivable Service revenue Advertising expense Accounts payable $ 8,400 10,400 1,800 4,400 10,800 45,000 Notes payable Salaries and wages expense (LO 4, 5), AP Equipment Maintenance and repairs expense Insurance expense $26,000 1,900 58,800 2,100 400 Cash Common stock No additional common stock was issued in May, but a dividend of $1,600 in cash was paid. Instructions (a) Prepare an income statement and a retained earnings statement for the month of May and a balance sheet at May 31, 2014. (b) Briefly discuss whether the company's first month of operations was a success. (c) Discuss the company's decision to distribute a dividend. (a) Net income Ret. eamings Tot assets $ 4,200 $ 2,600 $78,000
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