Martin Company Had the Following Transactions During Its First Month

question 1

Essay

Martin Company had the following transactions during its first month of operations:
June 1 The company received cash of $35,000 and issued common stock to the shareholders.
2 Borrowed $20,000 from the bank and signed a long-term note payable.
8 Purchased equipment with a short-term note payable for $10,000.
9 Performed services billed at $3,000 and received cash of $3,000.
10 Performed services for a client on account, $6,500.
12 Employees worked two weeks and were paid salaries of $1,000.
15 Paid the short-term note payable from the June 8 purchase.
22 Purchased office supplies on account for $7,000.
30 Paid amount due for office supplies.
30 Paid June's monthly rent of $500.
30 Paid the monthly income taxes of $2,200.
30 The Board of Directors declared and paid dividends of $1,000.
Required:
1. Journalize the entries. Omit the explanations.
2. Prepare a single-step income statement for the first month of operations. Include a proper heading.
3. Prepare a statement of retained earnings for the first month of operations. Include a proper heading.

---

Definitions:

UN Charter

A foundational treaty that established the United Nations in 1945 to promote international cooperation and to achieve peace and security.

Jacobo Arbenz Guzmán

The 25th President of Guatemala from 1951 until 1954, known for his progressive land reform policies, which eventually led to his overthrow in a coup orchestrated by the CIA.

Suez Canal

A man-made waterway in Egypt, connecting the Mediterranean Sea to the Red Sea, facilitating international maritime trade.

Mass Consumption

Mass consumption refers to the widespread purchase and use of goods and services by a large portion of the population, characterized by high levels of consumer spending and the availability of a wide range of products.