Question

Net income: $10.900 PR 1-3B Financial statements Obj. 5 Jose Loder established Bronco Consulting on August 1, 2018. The effect of cach transaction and the balances after each transaction for August follow: Assets Liabilities Accounts Account + Receivable + Supplies - Puyable + Commen Stock +75.000 Stockholders'Equity Fees Sataries Rent Earned - Expense - Expen - Dividends + Auto Supplies Misc -Expense-Expense - Expense Cash +75.000 92,000 92.000 167,000 -7000 -27,000 -27,000 140.000 000 134.000 -27,000 +33,000 75,000 125,000 - 27,000 -15.500 -2.500 75.000 78.000 33.000 75,000 -27,000 -15.500 -7.500 -5.000 31.000 -58,000 -27,000 -15.500 -7,500 3.100 33,000 -58,000 -27,000 -15,500 -4,100 -7.500 5.000 12.000 23.000 3.000 13.000 5.000 -27000 -15.500 5,100 -7.500 Instructions 1. Prepare an income statement for the month ended August 31, 2018 2. Prepare a retained earnings statement for the month ended August 31, 2018 3. Prepare a balance sheet as of August 31, 2018 . (Optional Prepare a statement of cash flows for the month ending August 31, 2018 1000

Answer 1

125,000 Bronco Consulting Income Statement For the Month Ended August 31, 2018 Fees Earned Expenses Salaries Expense Rent Expense Auto Expense Supplies Expense Miscellaneous Expense Total Expenses Net Income 58,000 27,000 15,500 6,100 7,500 114,100 10,900 Statement of Retained Earnings For the Month Ended August 31, 2018 Retained Earnings, August 1, 2018 Add: Net Income Less: Dividends Retained Earnings August 31, 2018 10,900 (5,000) 5,900

Bronco Consulting Balance Sheet As of August 31, 2018 Assets Current Assets Cash Accounts Receivable Supplies 3,000 Liabilities & Stockholders Equity Liabilities 48,000 Accounts Payable 33,000 2,900 Stockholders Equity Common Stock Retained Earnings Total Stockholders Equity 75,000 5,900 80,900 Total Assets 83,900 Total Liabilities & Stockholders Equity 83,900

Bronco Consulting Cashflow Statement - Direct method 92,000 Cash flows from Operating Activities Cash receipts Cash received from customers Cash payments Cash paid for rent Cash paid to suppliers Cash paid for auto expense Cash paid for miscellaneous expense Cash paid for salaries Total cash payments Net Cash Provided/(Used) by Operating Activities 27,000 6,000 15,500 7,500 58,000 114,000 (22,000) Cash flows from Investing Activities Net Cash Provided/(Used) by Investing Activities 75,000 (5,000) Cash flows from Financing Activities Proceeds from issue of common stock Dividends paid Net Cash Provided/(Used) by Financing Activities Net Change in Cash Cash at Beginning of Period Cash at End of Period 70,000 48,000 48,000

Bronco Consulting Cashflow Statement - Indirect method Cash flows from Operating Activities Net income Increase in Accounts Receivable Increase in Supplies Increase in Accounts Payable Net Cash Provided/(Used) by Operating Activities 10,900 (33,000) (2,900) 3,000 (22,000) Cash flows from Investing Activities Net Cash Provided/(Used) by Investing Activities 75,000 (5,000) Cash flows from Financing Activities Proceeds from issue of common stock Dividends paid Net Cash Provided/(Used) by Financing Activities Net Change in Cash Cash at Beginning of Period Cash at End of Period 70,000 48,000 48,000