Chapter 1, Problem 1.39BE

LO 4

(Learning Objective 4: Construct an income statement and a statement of retained earnings) Assume Island Coffee Roasters Corporation ended the month of August 2019 with these data:

Payments of cash:
Acquisition of equipment.......	$200,000	Cash balance, August 1, 2019….	$ 0
Dividends ……………	2,700	Cash balance, August 31, 2019….	6,000
Retained earnings		Cash receipts:
August 1, 2019……………	0	Issuance (sale) of stock to owners ...........................	13,700
Retained earnings
August 31, 2019…………...	?	Rent expense.............................	1,800
Utilities expense …………	5,800	Common stock........	13,700
Adjustments to reconcile net income to net cash Provided by operations.........	1,400	Equipment …………..	200,000
		Office supplies………………..	7,500
		Accounts payable....................	8,900
Salary expense...................	78,100	Service revenue...........................	279,900

Requirement

  1. Prepare the income statement and the statement of retained earnings for Island Coffee Roasters Corporation for the month ended August 31, 2019.