P1-5 Income Statement, Statement of Retained Earnings, and Balance Sheet

P1-5 Income Statement, Statement of Retained Earnings, and Balance Sheet

P1-5 The following list, in alphabetical order, shows the various items that regularly appear on the financial statements of Maple Park Theatres Corp. The amounts shown for balance sheet items are balances as of September 30, 2014 (with the exception of retained earn- ings, which is the balance on September 1, 2014), and the amounts shown for income statement items are balances for the month ended September 30, 2014.

Accounts payable                                $17,600           furniture and fixtures             $34,000
accounts receivable                             6,410               land                                         26,000
advertising expense                             14,500             notes payable                          20,000
buildings                                             60,000             projection equipment              25,000
capital stock                                        50,000             rent expense-movies                50,600
cash                                                     15,230             retained earnings                     73,780
concessions revenue                            60,300             salaries and wages expense     46,490
cost of concessions sold                      23,450             ticket sales                               95,100
dividends paid during the month       8,400               water, gas, and electricity       6,700

Required
1.Prepare an income statement for the month ended September 30, 2014.
2. Prepare a statement of retained earnings for the month ended September 30, 2014.
3. Prepare a balance sheet at September 30, 2014.
4. You have $1,000 to invest. On the basis of the statements you prepared, would you use it to buy stock in Maple Park? Explain. What other information would you want before making a final decision?

Hint: First determine if an account is an asset, a liability, stockholders' equity, revenue, or expense, and then put a check mark by each item as you use it in preparing the financial statements to ensure you account for everything. Format is important, including a proper heading, so the user of the statement knows what they are reading. 

TUTORIAL PREVIEW

PROBLEM 1-5 INCOME STATEMENT, STATEMENT OF RETAINED EARNINGS, AND BALANCE SHEET

1.                                           MAPLE PARK THEATRES CORP.

INCOME STATEMENT

FOR THE MONTH ENDED SEPTEMBER 30, 2014

Revenues:

      Ticket sales                                                                             $95,100

      Concessions revenue                                                                60,300         $155,400

Expenses:

      Rent expense—movies                                                          $50,600

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