Strategic Managerial Accounting Income Statement

Questions: 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 entitys statement of retained earnings for the month ended September 30, 20XX. Answers: 1. Journal Entries Particulars Dr Cr Particulars Dr Cr Particulars Dr Cr Cash a/c 20,000 Cash a/c 700 Accounts Payable a/c 8000 Common stock a/c 20,000 Service Revenue a/c 700 Cash a/c 8000 Particulars Dr Cr Particulars Dr Cr Particulars Dr Cr Supplies a/c 1000 Cash a/c 1000 Cash a/c 1000 Accounts Payable a/c 1000 Accounts Receivables a/c 1000 Common stock a/c 1000 Particulars Dr Cr Particulars Dr Cr Particulars Dr Cr Accounts Receivables a/c 3000 office rent a/c 900 advertising a/c 100 Service Revenue a/c 3000 cash a/c 900 cash a/c 100 Particulars Dr Cr Particulars Dr Cr drawings a/c 1500 cash a/c 100 cash a/c 1500 supplies a/c 100 2. Income Statement Best Foot Forward Inc. Income Statement Month Ended September 30, 20XX Revenues Service revenue ($700 + $3,000) $ 3,700.00 Expenses Rent expense $ 900.00 Advertising expense $ 100.00 Total expenses $ 1,000.00 Net income $ 2,700.00 Equity Statement Best Foot Forward Inc. Statement of Owners Equity Month Ended September 30, 20XX Particulars Amount Amount Marilyn Crone, capital, August 31, 20XX $7,700 Add: Investments by owner ($20,000 + $1,000) 21,000 Net income for the month 2,700 31,400 Less Withdrawals by owner (1,500) Marilyn Crone, capital, September 30, 20XX $29,900 3. Balance Sheet Best Foot Forward Inc. Balance Sheet At September 30, 20XX ASSETS Amount LIABILITIES Amount Cash $14,500 Accounts payable $1,000 Accounts receivable 3,500 Supplies 900 OWNERS EQUITY Land 12,000 Marilyn Crone, capital 29,900 Total liabilities and Total assets $30,900 owners equity $30,900 References Jones, Tracy, Helen Atkinson, and Angela Lorenz.Strategic Managerial Accounting. Oxford: Goodfellow Publishers Ltd, 2012. Print. Needles, Belverd E, and Marian Powers.Financial Accounting. Mason, OH: South-Western Cengage Learning, 2012. Print. Shim, Jae K, Joel G Siegel, and Jae K Shim.Financial Accounting. New York: McGraw-Hill, 2012. Print. Weygandt, Jerry J, Donald E Kieso, and Paul D Kimmel.Financial Accounting. Hoboken, N.J.: Wiley, 2012. Print.