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.

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Definitions:

Muscle Tissue

A body tissue composed of fibers that contract to produce movement or maintain posture.

Plump

Having a full, rounded shape; often used to describe a slightly overweight or well-nourished appearance.

Prosperity

A state of flourishing, success, or good fortune, particularly in terms of financial or material wealth.

Laziness

A lack of willingness to act or exert effort, often resulting in inactivity or avoidance of work.