## Solution to 2 Let's answer each part step by step using the given trial balance: --- ### **(a) Determine the net income for the quarter April 1 to June 30.** #### **Step 1: List Revenues** - **Service Revenue:** 11,360 - **Rent Revenue:** 1,600 **Total Revenues = 11,360 + 1,600 = 12,960** #### **Step 2: List Expenses** - Salaries and Wages Expense: 7,400 - Rent Expense: 500 - Depreciation Expense: 160 - Supplies Expense: 710 - Utilities Expense: 600 - Interest Expense: 40 **Total Expenses = 7,400 + 500 + 160 + 710 + 600 + 40 = 9,410** #### **Step 3: Calculate Net Income** \[ \text{Net Income} = \text{Total Revenues} - \text{Total Expenses} \] \[ \text{Net Income} = 12,960 - 9,410 = 3,550 \] --- ### **(b) Determine the total assets and total liabilities as of June 30, 2025.** #### **Assets** - Cash: 5,360 - Accounts Receivable: 580 - Prepaid Rent: 1,200 - Supplies: 920 - Equipment: 12,000 - Less: Accumulated Depreciation (700) \[ \text{Net Equipment} = 12,000 - 700 = 11,300 \] **Total Assets:** \[ 5,360 + 580 + 1,200 + 920 + 11,300 = 19,360 \] --- #### **Liabilities** - Notes Payable: 4,000 - Accounts Payable: 900 - Salaries and Wages Payable: 700 - Interest Payable: 50 - Unearned Rent Revenue: 400 **Total Liabilities:** \[ 4,000 + 900 + 700 + 50 + 400 = 6,050 \] --- ### **(c) Determine the amount that appears for Retained Earnings at June 30, 2025.** #### **Step 1: Start with Opening Balance** - **Since the company is new (organized April 1, 2025), opening retained earnings = .** #### **Step 2: Add Net Income** - Net Income (from part a): 3,550 #### **Step 3: Less Dividends** - Dividends: 500 \[ \text{Retained Earnings} = + 3,550 - 500 = 3,050 \] --- ## **Final Summary** - **Net Income (April 1 - June 30, 2025):** **R$ 3,550** - **Total Assets (June 30, 2025):** **R$ 19,360** - **Total Liabilities (June 30, 2025):** **R$ 6,050** - **Retained Earnings (June 30, 2025):** **R$ 3,050** --- **These computations summarize Ming Co.'s financial position and performance for the quarter ended June 30, 2025.**

## Summary of Questions ### **Question 2: Net Income** Ming Co. achieved a net income of R$ 3,550 for the quarter ending June 30, 2025, after accounting for total revenues of R$ 12,960 and total expenses of R$ 9,410. This reflects effective management of costs relative to revenue generation during the quarter. ### **Question 2: Total Assets and Liabilities** As of June 30, 2025, Ming Co. reported total assets of R$ 19,360 and total liabilities of R$ 6,050. This indicates a healthy asset-to-liability ratio, suggesting financial stability. ### **Question 2: Retained Earnings** The retained earnings for Ming Co. at June 30, 2025, amount to R$ 3,050 after incorporating the net income and deducting dividends. This demonstrates the company's capacity to reinvest profits while managing shareholder distributions.