Question

Assume the November transactions for Camindo Co. are as follows:

Received cash of $60,000 from investors in exchange for common stock.
Provided services of $16,300 on account.
Purchased supplies on account $750.
Received cash of $11,800 from clients for services previously billed.
Received $6,250 for services provided from clients who paid cash.
Paid $600 on account for supplies that had been purchased.
Paid $3,380 for a one-year insurance policy.

Paid the following expenses: wages, $7,800; utilities, $1,000; rent, $3,750.
Paid dividends of $2,300 to stockholders.

Required:
Record the transactions, using the integrated financial statement.

Answer 1

Answer and Explanation:

The preparation of the transactions using the integrated financial statement is prepared with the help of spreadsheet which is attached below:-

Cash balance = $59,220

Net income = Services on account + Received services - Retained earnings

= $16,300 + $6,250 - $12,550

= $10,000

So, to reach net income we simply added the services on account with received services and deduct the retained earnings.