Chapter 1, Problem 9E

Preparing an Income Statement and Balance Sheet

Five individuals organized Miami Music Corporation on January 1. At the end of January 31, the following monthly financial data are available:

Total Revenues	$131,000
Operating Expenses	90,500
Cash	30,000
Accounts Receivable	25,300
Supplies	40,700
Accounts Payable	25,700
Common Stock	30,600

No dividends were declared or paid during January.

Required:

1. 1. Complete the following income statement and balance sheet for the month of January.

	MIAMI MUSIC CORPORATION Income Statement For the Month Ended January 31
Total Revenues			$_____
Operating Expenses			_____
Net Income			$_____
MIAMI MUSIC CORPORATION Balance Sheet At January 31
Assets
Cash			$_____
Accounts Receivable			_____
Supplies			_____
Total Assets			$_____
Liabilities
Accounts Payable			$_____
Total Liabilities
Stockholders’ Equity
Common Stock			_____
Retained Earnings			_____
Total Stockholders’ Equity			_____
Total Liabilities and Stockholders’ Equity			$_____

1. 2. Did Miami Music Corporation generate a profit? Which financial statement indicates this?
2. 3. Docs Miami Music Corporation have sufficient resources to pay its liabilities? Which financial statement indicates this?