Question

Martinez Equipment Repair began operating in September 2017. It prepares financial statements at the end of each month On November 1, 2017, a tabular summary includes the following information Note that Martinez began the month with $3.730 in Retained Earnings. This balance represents the results of its first two months of business Assets Accts. Cash Rec Supplies - Equip 11/1 Bal 3.520 - 3,090 + 1.850 10,730 Liabilities + Stockholders' Equity Ace Depr: Accts. UnearnSal/Wages Com Equip Pay. Serv. Rev. Pay Stock Retained Earnings 500 - 3.030 - 400 800 + 10.730. 3,730 During November, the following summary transactions were completed is for October salaries payable Nov. 8 Paid $1.220 for salaries due employees, of which $420 is for November and 10 Received $1.820 cash from customers in payment of account 12 Received $3,810 cash for services performed in November 15 Purchased store equipment on account $3.770 17 Purchased supplies on account $1.410. 20 Paid creditors $2.560 of accounts payable due 22 Paid November rent $550. 25 Paid salaries $1.070 27 Performed services on account worth $910 and billed customers. 29 Received $770 from customers for services to be performed in the future. Adjustment data 1. Supplies on hand are valued at $1.150 2. Accrued salaries payable are $510. 3 Depreciation for the months $290 4 Services were performed to satisfy $510 of unearned service revenue

Answer 1

Solution:

Income Statement for November 30:

Martinez Equipment Repair
For month ended November 30
Revenue
Service Revenue(A)		$       5,230
Operating Expenses / Expenses
Salaries/Wages Expense	$                 2,000
Supplies Expense	$                 2,110
Rent Expense	$                    550
Depreciation Expense	$                    290
Total Operating Expense (B)		$       4,950
Net Income (A-B)		$           280

Notes:

1) Service revenue = 3810+910+510=$ 5,230

2) Salaries/Wages Expense = 420(paid)+1070(paid)+510(accrued) = $ 2000

3) Supplies Expense = 1850(Opening) +1410(Purchases) -1150(Closing) = $ 2,110

4) Rent and depreciation expenses are given in the question.

5) Remaining transactions does not considered in income statement