As a team, prepare the income statement of Maltbee Lawn Service for the four months May through August. Prepare the classified balance sheet of Maltbee Lawn Service at August 31.
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Next, as a small group discuss the following. Was Maltbee's summer work successful? Give the reason for your answer. What are the steps in the accounting cycle
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I'm sorry, but as an AI text-based assistant, I am unable to provide or attach any files. However, I can guide you on how to prepare an income statement and a classified balance sheet for Maltbee Lawn Service based on the given information.
To prepare the income statement for the four months (May through August), you would need the revenue and expense information for that period. The income statement format typically includes the following sections:
1. Revenue: Include the total amount of revenue earned during the four months. This may include revenue from lawn care services, equipment rental, or any other sources of income.
2. Cost of Goods Sold (COGS): If applicable, deduct the cost of goods sold from the revenue. This includes any direct costs associated with providing lawn care services, such as labor, materials, or equipment costs.
3. Operating Expenses: Include any operating expenses incurred during the period, such as rent, utilities, insurance, advertising, or any other expenses directly related to running the business.
4. Depreciation Expense: If there are any long-term assets (such as equipment or vehicles) being used in the business, include the depreciation expense associated with them.
5. Interest Expense: If the business has any loans or debt, include the interest expense.
6. Income Tax Expense: Include any income tax expense based on the applicable tax rates.
To prepare the classified balance sheet for Maltbee Lawn Service as of August 31, you would need the asset, liability, and equity information at that specific date. A classified balance sheet typically includes the following sections:
1. Assets: List all the assets owned by the business, usually divided into current assets (those that can be converted into cash within a year) and long-term assets (those held for more than a year). Examples of current assets may include cash, accounts receivable, or inventory. Long-term assets may include property, plant, and equipment.
2. Liabilities: List all the liabilities owed by the business, typically divided into current liabilities (those due within a year) and long-term liabilities (those due after a year). Current liabilities may include accounts payable or short-term loans, while long-term liabilities may include mortgages or long-term loans.
3. Equity: Calculate the owner's equity by subtracting the total liabilities from the total assets. Include any additional equity accounts such as retained earnings or capital contributions.
Regarding whether Maltbee's summer work was successful or not, this requires further information about the company's goals, objectives, and criteria for success. Evaluating the success of a business typically involves analyzing financial performance, customer satisfaction, growth, and other relevant factors. Without specific details, it is difficult to determine if Maltbee's summer work was successful.
Lastly, the steps in the accounting cycle generally include:
1. Analyzing and recording transactions: This involves identifying and recording the company's financial transactions in the appropriate accounts.
2. Posting to the general ledger: Transfer the transaction data from the journal to the general ledger, which contains individual accounts for each asset, liability, equity, revenue, and expense.
3. Adjusting entries: Make any necessary adjustments for accruals, deferrals, depreciation, or other adjustments to ensure that the financial statements reflect the true financial position and performance of the business.
4. Preparing the financial statements: Based on the adjusted account balances, prepare the income statement, balance sheet, and statement of cash flows.
5. Closing entries: Close the temporary accounts (revenue and expense accounts) by transferring their balances to the appropriate permanent accounts (retained earnings).
6. Post-closing trial balance: Prepare a trial balance to ensure that the debits and credits are equal after the closing entries have been made.
Please note that the accounting cycle may vary depending on the organization and its specific accounting practices and systems.