Problem - Marilyn Crone owns and operates a public relations firm called Best Foot forward, Inc. The following amounts summarize her business on August 31, 20XX.
Assets: Cash 2,200
Accounts receivable 1,500
Land 12,000
Liabilities:
Accounts Payable 8,000
Stockholders' Equity:
Common Stock 5,000
Retained Earnings 2,700
During September the business completed these transactions:
a. Issued common stock and received cash of $20,000
b. Performed service for a client and received cash of $700.
c. Paid off the beginning balance of accounts payable.
d. Purchased supplies on account, $1,000.
e. Collected cash from a customer on account, $1,000.
f. Received cash of $1,000 and issued common stock.
g. Consulted for a Senate candidate and billed the client for services rendered, $3,000.
h. Paid the following business expenses for the month:
1. Paid office rent, $900.
2. Paid advertising, $100.
i. Sold supplies to another business for $100 cash which was the cost of the supplies.
j. Paid cash dividends of $1,500.
Requirements:
1. Prepare journal entries for the September transactions.
2. Prepare the income statement of Best Foot Forward, Inc., for the month ended September 20XX.
3. Prepare the entity's statement of retained earnings for the month ended September 30, 20XX.
4. Prepare the balance sheet at September 30, 20XX.