On July 1, Lula Plume created a new self-storage business, Safe Storage Co. The following transactions occurred during the companies first month. July 2Plume invested $30,000 cash and buildings worth $150,000 in the company in exchange for its common stock.July 3The company rented equipment by paying $2,000 cash for the first month’s (July) rent.July 5The company purchased $2,400 of office supplies for cash.July 10The company paid $7,200 cash for a 12-month insurance policy. Coverage begins on July 11.July 14The company paid $1,000 cash for two weeks' salaries earned by employees.July 24The company collected $9,800 cash for storage revenue from customers.July 28The company paid $1,000 cash for two weeks' salaries earned by employees.July 29The company paid $950 cash for minor repairs to buildings.July 30The company paid $400 cash for this month's telephone bill.July 30The company paid $2,000 cash in dividends. The company's chart of accounts follows: 101Cash403Commissions Revenue106Accounts Receivable612Depreciation Expense—Buildings124Office Supplies622Salaries Expense128Prepaid Insurance637Insurance Expense167Buildings640Rent Expense168Accumulated Depreciation—Buildings650Office Supplies Expense209Salaries Payable684Repairs Expense307Common Stock688Telephone Expense318Retained Earnings901Income Summary319Dividends adjusting entries as of July 31: Prepaid insurance of $400 expired this month. At the end of the month, $1,525 of office supplies are still available. This month’s depreciation on buildings is $1,500. Employees earned $100 of unpaid and unrecorded salaries as of month-end. The company earned $1,150 of storage revenue that is not yet recorded at month-end. Required:Prepare the statement of retained earnings for the month of July 31. Retained earnings, July 1 Add: Net income Less: Dividends Retained earnings, July 31 Accounting PrinciplesACC 211Comprehensive Problem (Assignment)Comprehensive Problem SetOn July 1, Lula Plume created a new self-storage business, Safe Storage Co. The followingtransactions occurred during the companies first month.July 2 Plume invested $30,000 cash and buildings worth $150,000 in the company in exchange for itscommon stock.July 3 The company rented equipment by paying $2,000 cash for the first month's (July) rent.July 5 The company purchased $2,400 of office supplies for cash.July 10July 14The company paid $7,200 cash for a 12-month insurance policy. Coverage begins on July 11.The company paid $1,000 cash for two weeks' salaries earned by employees.The company collected $9,800 cash for storage revenue from customers.July 24July 28The company paid $1,000 cash for two weeks' salaries earned by employees.The company paid $950 cash for minor repairs to buildings.July 29July 30The company paid $400 cash for this month's telephone bill.July 30 The company paid $2,000 cash in dividends.The company's chart of accounts follows:101 Cash403 Commissions Revenue106 Accounts Receivable612 Depreciation Expense-Buildings622 Salaries Expense124 Office Supplies128 Prepaid Insurance637 Insurance Expense167 Buildings640 Rent Expense650 Office Supplies Expense168 Accumulated Depreciation-Buildings209 Salaries Payable684 Repairs Expense688 Telephone Expense307 Common Stock318 Retained Earnings319 Dividends901 Income Summaryadjusting entries as of July 31:a. Prepaid insurance of $400 expired this month.b. At the end of the month, $1,525 of office supplies are still available.c. This month's depreciation on buildings is $1,500.d. Employees earned $100 of unpaid and unrecorded salaries as of month-end.e. The company earned $1,150 of storage revenue that is not yet recorded at month-end.Required:Prepare the statement of retained earnings for the month of July 31.Retained earnings, July 1Add: Net incomeLess: DividendsRetained earnings, July 31

Retained Earning = Retained earning at the beginning+ Net Income-Dividends

Answered: Prepare the statement of retained…

Financial Accounting: The Impact on Decision Makers

10th Edition

ISBN:9781305654174

Author:Gary A. Porter, Curtis L. Norton

Publisher:Gary A. Porter, Curtis L. Norton

Chapter2: Financial Statements And The Annual Report

Section: Chapter Questions

Problem 2.1P: Materiality Joseph Knapp, a newly hired accountant wanting to impress his boss, stayed late one...

See similar textbooks

Related questions

Concept explainers

Question

On July 1, Lula Plume created a new self-storage business, Safe Storage Co. The following transactions occurred during the companies first month.

July 2	Plume invested $30,000 cash and buildings worth $150,000 in the company in exchange for its common stock.
July 3	The company rented equipment by paying $2,000 cash for the first month’s (July) rent.
July 5	The company purchased $2,400 of office supplies for cash.
July 10	The company paid $7,200 cash for a 12-month insurance policy. Coverage begins on July 11.
July 14	The company paid $1,000 cash for two weeks' salaries earned by employees.
July 24	The company collected $9,800 cash for storage revenue from customers.
July 28	The company paid $1,000 cash for two weeks' salaries earned by employees.
July 29	The company paid $950 cash for minor repairs to buildings.
July 30	The company paid $400 cash for this month's telephone bill.
July 30	The company paid $2,000 cash in dividends.

The company's chart of accounts follows:

101	Cash	403	Commissions Revenue
106	Accounts Receivable	612	Depreciation Expense—Buildings
124	Office Supplies	622	Salaries Expense
128	Prepaid Insurance	637	Insurance Expense
167	Buildings	640	Rent Expense
168	Accumulated Depreciation—Buildings	650	Office Supplies Expense
209	Salaries Payable	684	Repairs Expense
307	Common Stock	688	Telephone Expense
318	Retained Earnings	901	Income Summary
319	Dividends

adjusting entries as of July 31:

Prepaid insurance of $400 expired this month.
At the end of the month, $1,525 of office supplies are still available.
This month’s depreciation on buildings is $1,500.
Employees earned $100 of unpaid and unrecorded salaries as of month-end.
The company earned $1,150 of storage revenue that is not yet recorded at month-end.

Required:

Prepare the statement of retained earnings for the month of July 31.




Retained earnings, July 1
Add: Net income

Less: Dividends
Retained earnings, July 31

Accounting Principles
ACC 211
Comprehensive Problem (Assignment)
Comprehensive Problem Set
On July 1, Lula Plume created a new self-storage business, Safe Storage Co. The following
transactions occurred during the companies first month.
July 2 Plume invested $30,000 cash and buildings worth $150,000 in the company in exchange for its
common stock.
July 3 The company rented equipment by paying $2,000 cash for the first month's (July) rent.
July 5 The company purchased $2,400 of office supplies for cash.
July 10
July 14
The company paid $7,200 cash for a 12-month insurance policy. Coverage begins on July 11.
The company paid $1,000 cash for two weeks' salaries earned by employees.
The company collected $9,800 cash for storage revenue from customers.
July 24
July 28
The company paid $1,000 cash for two weeks' salaries earned by employees.
The company paid $950 cash for minor repairs to buildings.
July 29
July 30
The company paid $400 cash for this month's telephone bill.
July 30 The company paid $2,000 cash in dividends.
The company's chart of accounts follows:
101 Cash
403 Commissions Revenue
106 Accounts Receivable
612 Depreciation Expense-Buildings
622 Salaries Expense
124 Office Supplies
128 Prepaid Insurance
637 Insurance Expense
167 Buildings
640 Rent Expense
650 Office Supplies Expense
168 Accumulated Depreciation-Buildings
209 Salaries Payable
684 Repairs Expense
688 Telephone Expense
307 Common Stock
318 Retained Earnings
319 Dividends
901 Income Summary
adjusting entries as of July 31:
a. Prepaid insurance of $400 expired this month.
b. At the end of the month, $1,525 of office supplies are still available.
c. This month's depreciation on buildings is $1,500.
d. Employees earned $100 of unpaid and unrecorded salaries as of month-end.
e. The company earned $1,150 of storage revenue that is not yet recorded at month-end.
Required:
Prepare the statement of retained earnings for the month of July 31.
Retained earnings, July 1
Add: Net income
Less: Dividends
Retained earnings, July 31

Expert Solution

Trending now

This is a popular solution!

Step by step

Solved in 2 steps with 2 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.