AFM102 Lecture Notes - Lecture 3: Retained Earnings, General Ledger, Net Income
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In addition to presenting the computed answers, please also discuss how you arrived at each answers the accounting problem asks. The accounting problem presents a companyâs balance sheet and income statement. The Diamond Gem Cleaning and Maintenance Service Company is in the business of contracting its cleaning and maintenance services to office buildings. The balance sheet and income statement have blank lines. Determine the values that would be appropriate for each blank line. Provide a narrative of how you arrived at each value. In doing so, explain the account being valued and its relationship to the other financial data. For example, if the accounts payable line was missing, explain that you can derive its value based on knowing all the other values of the current liabilities section. Then explain what an account liability is, as well as why it would belong in the current liabilities section of the balance sheet
Please refer to the income statement and balance sheet of the Diamond Gem Cleaning and Maintenance Service Company available down:
Superior papers will mention and explain the following elements when responding to the assignment question:
Provide correct balances for the blank financial account lines.
Provide a narrative about how the values were determined.
Provide a definition and explanation of each account line that was completed
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. In a one-page memo, provide an explanation to the managementteam on July's financial performance. Please provide a one-pageexplanation. Thanks in advance
Ajayi Art Inc. | ||||
Trial Balance | ||||
Account Title& Explaination | Amt (Dr) | Amt (Cr) | ||
Cash | $ 2,48,525 | |||
AccountsReceivable | $ 2,400 | |||
Prepaid Rent | $ 2,000 | |||
OfficeEquipment | $ 22,250 | |||
Art Supplies | $ 8,790 | |||
AccumulatedDepreciation | $ 371 | |||
AccountsPayable | $ 6,800 | |||
SalaryPayable | $ 3,800 | |||
InterestPayable | $185 | |||
ServiceRevenue | $ 4,300 | |||
UneanedRevenue | $ 3,500 | |||
Common Stock | $ 2,50,000 | |||
Note Payable | $ 22,250 | |||
SalaryExpenses | $ 3,800 | |||
Misc OfficeExpenses | $ 375 | |||
DepreciationExpenses | $ 371 | |||
Rent | $ 1,000 | |||
InterestExpenses | $ 185 | |||
SuppliesExpenses | $ 1,510 | |||
Total | $ 2,91,206 | $ 2,91,206 | ||
Ajayi Art Inc. | ||||
Income Statement | - | |||
Service Revenue | $ 4,300.00 | |||
Expenses | ||||
Salary Expenses | $ 3,800.00 | |||
Supplies Expenses | $ 1,510.00 | |||
Rent Expenses | $ 1,000.00 | |||
Interest Expenses | $ 185.42 | |||
Depreciation | $ 370.83 | |||
Misc.Office Expenses | $ 375.00 | |||
Total Expenses=(B) | $ 7,241.25 | |||
Net Income(A)-(B) | $ -2,941.25 | |||
Ajayi Art Inc. | ||||
Statement of Owner'sEquity | ||||
July 31st | ||||
Beginning RetainedEarnings | 0 | |||
Add: Net Income | $ (2,941.25) | |||
Ending Retained Earnings | $ (2,941.25) | |||
Ajayi Art Inc. | ||||
Balance Sheet | ||||
July 31st | ||||
Assets | ||||
Cash | $ 2,48,525.00 | |||
Accounts Receivable | $ 2,400.00 | |||
Art Supplies | $ 8,790.00 | |||
Prepaid Rent | $ 2,000.00 | |||
Office Equipment | $ 22,250.00 | |||
AccumulatedDepreciation-Office Equipment | $ -370.83 | |||
Total Assets | $ 2,83,594.17 | |||
Liabilities &Stockholder's equity | ||||
Liabilities | ||||
Accounts Payable | $ 6,800.00 | |||
Salary Payable | $ 3,800.00 | |||
Interest Payable | $ 185.42 | |||
Unearned Service Revenue | $ 3,500.00 | |||
Note Payable | $ 22,250.00 | |||
Total Liabilities | $ 36,535.42 | |||
Stockholder's Equity | ||||
Common Stock | $ 2,50,000.00 | |||
Retained Earnings | $ (2,941.25) | |||
Total Equity | $ 2,47,058.75 | |||
Total Liabilities &Stockholder's Equity | $ 2,83,594.17 |