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Accounting (Text Only)

26th Edition
Carl Warren + 2 others
ISBN: 9781285743615

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BuyFindarrow_forward

Accounting (Text Only)

26th Edition
Carl Warren + 2 others
ISBN: 9781285743615
Textbook Problem
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Financial statements

The amounts of the assets and liabilities of Wilderness Travel Service at April 30, 2016, the end of the year, and its revenue and expenses for the year follow. The capital of Harper Borg, owner, was $180,000 at May 1, 2015, the beginning of the year, and the owner withdrew $40,000 during the year.

Accounts payable $ 25,000
Accounts receivable 210,000
Cash 146,000
Fees earned 875,000
Miscellaneous expense 15,000
Rent expense 75,000
Supplies $ 9,000
Supplies expense 12,000
Taxes expense 10,000
Utilities expense 38,000
Wages expense 525,000

Instructions

  1. 1. Prepare an income statement for the year ended April 30, 2016.
  2. 2. Prepare a statement of owner’s equity for the year ended April 30, 2016.
  3. 3. Prepare a balance sheet as of April 30, 2016.
  4. 4. What item appears on both the income statement and statement of owner’s equity?

a)

To determine

Financial statements:

Financial statements refer to those statements, which are prepared by the Company according to particular formats in accounting to show its financial position. The financial statements consist of the balance sheet, income statement, statement of owners’ equity, and the cash flow statement.

Income statement:

Income statement is a financial statement that shows the net income or net loss by deducting the expenses from the revenues and vice versa.

Statement of owner's’ equity:

The statement of owner's equity reports the changes in the owner's equity for a period of time.

Balance Sheet:

Balance Sheet summarizes the assets, the liabilities, and the Shareholder’s equity of a company at a given date. It is also known as the statement of financial status of the business.

To prepare: The income statement for the year ended December 31, 2016 for NT Agency.

Explanation

Prepare the income statement for the year ended December 31, 2016 for NT Agency.

...
NT Agency
Income Statement
For the Year Ended December 31, 2016
Particulars Amount ($) Amount ($)
Revenues
Fees Earned $912,500
Less: Expenses
     Wage expense

b)

To determine

To prepare: The statement of owner's equity for the year ended December 31, 2016 for NT Agency.

c)

To determine

To prepare: The balance sheet for the year ended December 31, 2016 for NT Agency.

d)

To determine

To Identify: The items that appear on both statement of owner's equity and balance sheet of NT Agency.

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