60.1K

Verified Solution

Link Copied!

The Franco Corporation had the following opening trial balance at the beginning of its fiscal year, August 1, 2020. The company adjusts its accounts monthly. Debits Credits Cash $4.900 Accounts receivable 7,050 Supplies 1.700 20.000 Equipment Accumulated depreciation Unearned revenue Common shares $4.000 3,000 6.000 Retained earnings 20.650 $33,650 Totals $33,650 During the month of August, the following selected transactions took place: August 1: Borrowed $8,000 from the bank for one year at an interest rate of 10%. Interest is due on the first day of each following month, beginning September 1. August 2: Paid $3,500 for two months' rent in advance for August and September. August 7: Purchased $500 supplies on account. Supplies on hand at August 31 were $650. August 13: Performed services on account, $18,200. August 14: Collected half of the outstanding accounts receivable. August 15: Paid salaries, $3,600. August 21: Received 3,500 cash from a customer for services to be performed in September. August 25: Declared and paid a dividend, $800. August 28: Performed $3,000 of services for a customer on account. August 31: The company owed $2,000 of salaries to its employees for the month just ended. August 31: The company earned $3,000 of revenue that had been received in advance. August 31: The equipment has a ten-year useful life and uses the straight-line method. August 31: The company performed $900 of services for a client that it had not billed or recorded. Required 1. Prepare an income statement for the month ending August 31, 2020. Keep all decimals when performing your calculations. Round final answers to the nearest whole number. Hand write your answer in your rough work. This will be submitted at the end of the test. 2. In the box below. Type in the net income/loss you calculated in your income statement. Round your answer to the nearest whole number

Answer & Explanation Solved by verified expert

See Answer