Question

Requirement #6:
Prepare an adjusted trial balance in the space below.
Quick Tax Corporation
Adjusted Trial Balance
July 31
	0	0

During its first month of operation, the Quick Tax Corporation, which specializes in tax preparation, completed the following transactions. July 1 Began business by making a deposit in a company bank account of $40,000, in exchange for 4,000 shares of $10 par value common stock. July 3 Paid the current month's rent, $2,500 July 5 Paid the premium on a 1-year insurance policy, $3,600 July 7 Purchased supplies on account from Little Company, $700. July 10 Paid employee salaries, $2,800 July 14 Purchased equipment from Lake Company, $9,500. Paid $1,500 down and the balance was placed on account. Payments will be $500.00 per month for 20 months. The first payment is due 8/1. Note: Use accounts payable for the balance due. July 15 Received cash for preparing tax returns for the first half of July, $6,500 July 19 Made payment on account to Lake Company, $500. July 31 Received cash for preparing tax returns for the last half of July, $8,250 July 31 Declared and paid cash dividends of $450.

Requirement #7: Prepare the financial statements for the Quick Tax Corporation as of July 31 in the space below. You will only be preparing the income statement, statement of retained earnings, and the balance sheet. The statement of cash flows is a required financial statement, but is not required for this case study. Quick Tax Corporation Quick Tax Corporation Quick Tax Corporation Income Statement Statement of Retained Earnings Balance Sheet For the Month Ending July 31 For the Month Ending July 31 July 31 Revenues: Retained Earnings, July 1 Assets: Revenue Add: Net Income Cash Subtotal Supplies Expenses: Less: Dividends Prepaid Insurance Rent Expense Retained Earnings, July 31 Equipment Salaries Expense Less: Accum. Depr. Insurance Expense Total Assets Supplies Expense Depreciation Expense Liabilities: Income Tax Expense Accounts Payable Total Expenses Income Tax Payable Total Liabilities Net Income Stockholders' Equity: Common Stock Retained Earnings Total Stockholders' Equity Total Liabilities and Stockholders' Equity

Answer 1

QUICK TAX CORPORATION
ADJUSTED TRIAL BALANCE AS ON 31ST JULY
		(IN $)
	DEBIT	CREDIT
Common Stock	.	40,000
cash	42,700
Revenues		14750
Rent for July	2500
Insurance premium for
the month	300
Supplies	700
Employees' Salaries	2800
Equipment	9500
A/c Payable		7500
Prepaid Insurance Premium	3300
Dividend	450
Total	62,250	62,250
Workiing for Cash balance:
	DEBIT	CREDIT
Common stock	40,000
Revenues	14750
Employees' salaries		2800
Rent		2500
Supplies		700
Insurance Premium		3600
Purchase of Eqpt		2000
Dividend Paid		450
Balance c/d		42,700
Total	54,750	54,750
To Bal b/d	42,700
INCOME STATEMENT FOR THE MONTH ENDED 31ST JULY
INCOME
Revenues		14750
Less:
Salaries	2800
Rent	2500
Supplies	700
Insurance Premium	300	6300
		8450
Less:Dividend		450
Retained Profit		8000
QUICK TAX CORPORATION
BALANCE SHEET AS ON 31ST JULY			(IN $)
LIABILITIES		ASSETS
Common Stock	40,000	Cash	42,700
A/c Payable	7,500	Equipment	9,500
P&L Account	8,000	Prepaid Insurance	3300
	55,500		55,500
STATEMENT OF RETAINED EARNINGS FOR THE MONTH ENDED 31ST JULY
			(IN $)
Retained earnings as on 1st July			0
Add: Net Income for July			8450
			8450
Less:Dividend paid			450
Retained earnings as on 31st July			8000