Financial information related to Revival Interiors for August and September of the current year is as follows:
| |
August 31, 2004
|
September 30, 2004
|
|
Accounts payable
|
$ 3,850
|
$ 4,150
|
|
Accounts receivable
|
8,500
|
9,780
|
|
Capital stock
|
10,000
|
10,000
|
|
Retained earnings
|
?
|
?
|
|
Cash
|
15,000
|
25,500
|
|
Prepaid expenses
|
750
|
600
|
a. Prepare balance sheets for Revival Interiors as of August 31 and as of September 30.
b. Determine the amount of net income for September, assuming that no additional capital stock was issued and no dividends were paid.
c. Determine the amount of net income for September, assuming that no additional capital stock was issued, but dividends of $7,500 were paid.