Prepare an Income Statement and a Statement of Retained Earnings

question 143

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 Magna Designer Corporation for the first month of their operations are as follows:
• On June 1,2017,Magna 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 websites and promised to pay a total of $1,200 at a later date.
• On June 13,Magna Designers 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,Magna Designers made a payment of $500 to one of the websites that it owed for advertising provided earlier in the month.
• No dividends were paid during the month.

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Definitions:

Sample Value

A single observation or measurement taken from a larger set of data, known as a sample.

Significant Difference

A statistical assessment that shows that the observed results in a study were unlikely to have occurred by chance.

Standard Error

The standard deviation of the sampling distribution of a statistic, typically used to measure the accuracy of sample mean estimates.

Population Standard Deviation

A statistic that measures the dispersion or spread of a set of data points in a population.