Prepare an Income Statement and a Statement of Retained Earnings $\$ 1,800$

question 64

Essay

Prepare an income statement and a statement of retained earnings for the month of May.Also,prepare a balance sheet as of May 31,2015 for Murphy Corporation.The financial transactions of Murphy Corporation for the month of May,their first month of operations,are as follows:
? On May 1, 2015, Muphy Corportion issued common stock in exchange for \$20,000 cash from a stockholder, Deborah Merchant.

? On May 3, the coporation borrowed \$5,000 from a creditor and executed a note payable with the principal and interest to be due in one year.
? On May 7, the coporation purchased \$15,000 of equipment for cash.
? On May B, Murphy Corporation rendered service to its client and earned \$3,000 in cash.
? On May 12, the coporation incured repair expense of $\$ 1,800$ and promised to pay the repair contractor the following month.
? On May 1B, the corporation rendered service to a new client in the amount of \$B,000 on account, as the client promised to pay the following month.
? At the end of May, Murphy Corporation distributed cash dividends of $\$ 1,500$ .

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Definitions:

Discount Amount

The reduced amount from the original price of goods or services, often provided as an incentive or for early payment.

Discounted Note

A promissory note sold at a discount from its face value, where the difference between the purchase price and the value at maturity represents the interest income for the investor.

Maturity Value

The amount payable to the holder of a financial instrument at its maturity date, including the principal and any accrued interest.

Interest

The cost paid for borrowing money, typically expressed as a percentage of the total amount loaned.