Miles Inc. experienced the following events in year 1, its first year of operati
ID: 2337233 • Letter: M
Question
Miles Inc. experienced the following events in year 1, its first year of operations:1. Received $20,000 cash from the issue of common stock 2. Preformed services on account for $56,000 3. Paid the utility expense of $2,504.collected $48,000 of the accounts receivable 5. Recorded $10,000 of accrued salaries at the end of the year. 6. Paid a $2,000 cash dividend to the stockholders Required a. Record the events in general ledger accounts under an accounting equation. In the last column of the table, provide appropriate account tittes for the Retained Earnings amounts. The first transaction has been recorded as an example. (Select "NA" if there is no effect on the Accounts Titles for Retained Earnings". Enter any decreases to account balances with a minus sign.) Accounting Equation Liabilities Stockholders' Equity Event ained Retained Earnings Cash Stock Earnings 20,000 20,000 20,000
Explanation / Answer
Miles Inc Accounting equation event Assets = Laibilities + Stockholders equity Cash Account receivable salaries payable common stock retained earnings Account titles for retained earning 1 20000 20000 NA 2 56000 56000 Service revenue 3 -2504 -2504 utility exp 4 48000 -48000 NA 5 = 10000 -10000 Salaries exp 6 -2000 -2000 Dividends total 63496 8000 = 10000 + 20000 41496