Question

Survey of Accounting Exam 1 Review Packet Practice Problem +3 (Weeks #3:5 Material Little Lou Company was formed on September 1, 2018 and completed the following transactions during its first month of operations: 1. Acquired $5,000 cash from the issue of common stock. 2. Paid $1,200 in advance for advertising for six months. 3. Received $8,000 cash in advance for services to be performed in September October, November, and December 4. Purchased supplies of $2,000 on account. 5. Borrowed $20,000 cash from the bank. 6. Provided services of $80,000 for cash. 7. Provided services of $60,000 on account. 8. Colected $30,000 from customers on account 9. Paid for operating expenses with cash of $25,000. 10. Paid $1,800 on accounts payable. 11. Paid a $500 cash dividend to the stockholders. Information for Soptember adjusting entrios: 12. The advance payment for advertising was made on September 1 for a six-month term. 13. The cash advance for services to be provided in the futuro was collected on September 1 and the four month contract started on that day. 14. $150 of supplies remain on hand at the end of the month. 15. $4,200 of woges have been corned by employees but not yet paid. 16. $100 of interest revenue has been comed and will be deposited in the company accounts on October 1 Little Lou uses the following account titles: Accounts Payable, Accounts Receivable, Advertising Exponso, Cash, Common Stock Dividends, Interest Receivable, Interest Revenue, Notes Payable, Operating Expenses, Prepaid Advertising, Retained Earnings, Services Revenue. Crne Cannoncen

Answer 1

Little Lou Company
General Ledger
Cash
	Common stock	5,000		Advertisement	200
	Service Revenue	2,000		Prepaid Advt	1,000
	Unearned service revenue	6,000		Operating Expenses	25,000
	Service Revenue	80,000		Accounts payable	1,800
	Accounts Receivable	30,000		Dividend	500
	Notes Payable	20,000
Balance		1,14,500
Common stock
				Cash	5,000
			Balance		5,000
Supplies
	Accounts Payable	2,000		Closing Inventory	150
Balance		1,850
Accounts Payable
	Cash	1,800		Supplies	2,000
			Balance		200
Service Revenue
				Cash	2,000
				Cash	80,000
				Accounts Receivable	60,000
			Balance		1,42,000
Accounts Receivable
	Service Revenue	60,000		Cash	30,000
Balance		30,000
Operating Expenses
	Cash	25,000
Balance		25,000
Advt.
	Cash	200
Balance		200
Prepaid Advt.
	Cash	1,000
Balance		1,000
Unearned Service Revenue
				Cash	6,000
			Balance		6,000
Notes Payable
				Cash	20,000
			Balance		20,000
Dividend
	Cash	500
Balance		500
Interest Revenue
				Interest Receivable	100
			Balance		100
Interest Receivable
	Interest Revenue	100
Balance		100
Wages
	Wages Payable	4,200
Balance		4,200
Wages Payable
				Wages	4,200
			Balance		4,200

Little Lou Company
Net Income Statement for September
Service Revenue	1,42,000
Total Revenue	1,42,000
Expenses:
Supplies	1,850
Operating	25,000
Advt.	200
Wages	4,200
		31,250
Net Operating Income	1,10,750
Interest Revenue	100
Net Income	1,10,850

Net income for September $110,850

Amount to Retained Earnings $110,850

Amount left in Retained Earnings after Dividend $110,350

Little Lou Company
Statement of Shareholders Equity on Sep 30
	Common Stock	RE	Total SE
Beginning			0
Plus	5,000		5000
Plus		1,10,850	110850	Net Income
Less		-500	-500	Dividend Paid
Ending	5000	110350	115350

Little Lou Company
Item	Computations	Total to report $
Net Income	142,000+100-1850-25000-4200-200	110,850
Total Assets	114500+150+30000+1000+100	145,750	(cash+inventory+AR+prepaid advt+Interest receivable)
Total Liabilities	200+6000+4200+20000	30,400	(AP+unearned revenue+Wages payable+Loan)
Total SE	5,000+110850-500	115,350
Cash Flow From operating	110750-150-30000-1000+200+6000+4200	90,000	Net operating income - increase in current assets + increase in current liabilities
Cash Flow From Investing	0	0
Cash Flow From Financing	5000+20000-500	24,500	Common stock + Loan-dividend