Page 49 - Accounting Principles (A Business Perspective)

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30 Salaries paid (700) (700)
$ 7,500 $ 3,000 $ 40,000 = $ 800 $ 40,000 + $ 10,000 $ (300)
Riding and lesson
30 2,800 2,800
fees billed
$ 7,500 $ 5,800 $ 40,000 $ 800 $ 40,000 + $ 10,000 $ 2,500
b)
GREEN HILLS RIDING STABLE, INCORPORATE
Income Statement
For the Month Ended 2010 June 30
Revenues:
Horse boarding fees revenue $ 3,000
Riding and lesson fee revenue 2,800
Total revenues $ 5,800
Expenses:
Rent expense $ 1,200
Feed expense 800
Salaries expense 700
Miscellaneous expense 600
Total expenses 3,300
Net income $ 2,500
c)
GREEN HILLS RIDING STABLE, INCORPORATED
Statement of Retained Earnings
For the Month Ended 2010 June 30
Retained earnings, June 1 $ -0-
Add: Net income for June 2,500
Total $ 2,500
Less: Dividends -0-
Retained earnings, June 30 $ 2,500
d)

GREEN HILLS RIDING STABLE, INCORPORATE
Balance Sheet
2010 June 30
Assets
Cash $ 7,500
Accounts receivable 5,800
Land 40,000
Total assets $ 53,300
Liabilities and Stockholders' Equity
Liabilities:
Accounts payable $ 800
Noted payable 40,000
Total liabilities $ 40,800
Stockholders' equity:
Capital stock $ 10,000
Retained earnings 2,500
Total stockholders' equity $ 12,500
Total liabilities and stockholders' equity $53,300.00
Key terms
Accounting equation Assets = Equities; or Assets = Liabilities + Stockholders’ equity.
Accounts payable Amounts owed to suppliers for goods or services purchased on credit.
Accounts receivable Amounts due from customers for services already provided.

Accounting Principles: A Business Perspective 50 A Global Text