Prepare an Income Statement and a Statement of Retained Earnings

question 99

Essay

Prepare an income statement and a statement of retained earnings for the month of June. Also, prepare a balance sheet at June 30. The transactions of Modern Designer Corporation for the first month of their operations are as follows:
• On June 1, 2019, Modern Designer Corporation received $25,000 cash from its stockholders and gave common stock to the stockholders.
• The company rendered services to three clients on account with total revenues earned of $9,000.
• It then incurred an advertising expense on four different web sites and promised to pay a total of $1,200 at a later date.
• On June 13, Modern Designer purchased $1,000 worth of office supplies for cash. (The supplies are not used by June 30.)
• On June 22, it received $2,000 on account from a client and deposited it into the business account.
• On June 23, it incurred $1,300 for a legal expense and paid cash.
• On June 30, Modern Designer made a payment of $500 to one of the web sites that it owed for advertising provided earlier in the month.
• No dividends were paid during the month.

---

Definitions:

Emotional Stress

A state of emotional or psychological strain or tension resulting from demanding circumstances or events.

Depressive Mood Problems

Emotional disorders primarily characterized by persistent feelings of sadness, hopelessness, and a lack of interest or pleasure in activities.

Older Adult Widow

An elderly person who has lost their spouse through death and is navigating the associated emotional, social, and financial challenges.

Benzodiazepine

A class of psychoactive drugs commonly used to treat anxiety, insomnia, and several other conditions, known for their sedative effects.