Missing amounts from financial statements
The financial statements at the end of Wolverine Realty’s first month of operations are as follows:
Instructions
By analyzing the interrelationships among the four financial statements, determine the proper amounts for (a) through (q).
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.
Financial statements include the following statements:
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:
This statement reports the changes in the owners’ equity for a particular period of time
Statement of cash flows:
This statement reports all the cash transactions which are responsible for inflow and outflow of cash, and result of these transactions is reported as ending balance of cash at the end of reported period.
To Determine: The missing amount in the given financial statement of Company WR.
Calculate the missing amounts in the given financial statement of Company WR for month ended April 30, 2016.
Company WR | ||
Income Statement | ||
For the month ended April 30, 2016 | ||
Particulars | Amount ($) | Amount ($) |
Revenues | ||
    Fees earned |
| |
Expenses | ||
    Wages expense | $300,000 | |
    Rent expense | $100,000 | |
    Supplies expense | (b)  $30,000 | |
    Utilities expense | $20,000 | |
    Miscellaneous expense | $25,000 | |
Total expenses | $475,000 | |
Net income | $275,000 |
Table (1)
Company WR | ||
Statement of Owner's Equity | ||
For the month ended April 30, 2016 | ||
Particulars | Amount ($) | Amount ($) |
DR Capital, April 1, 2016 | (c) Â Â $0 | |
Investment on April 1,2016 | $375,000 | |
Net income for the month | (d)Â Â $275,000 | |
Changes before withdrawals | (e)Â Â Â Â $650,000 | |
Less: Withdrawals | $125,000 | |
Increase in Owner's equity | (f)Â Â $525,000 | |
DR Capital, April 30, 2016 | (g)Â Â $525,000 |
Table (2)
Company WR | ||
Balance Sheet | ||
April 30, 2016 | ||
Particulars | Amount ($) | Amount ($) |
Assets | ||
 Current Assets | ||
 Cash | $462,500 | |
 Supplies | $12,500 | |
 Land | $150,000 | |
 Total current assets | (h)   $625,000 | |
Liabilities and Stockholders’ Equity | ||
 Liabilities | ||
 Accounts payable | $100,000 | |
 Owner's equity | ||
 DR Capital | (i)   $525,000 | |
 Total liabilities and stockholders’ equity | (j)   $625,000 |
Table (3)
Company WR | ||
Statement of Cash Flows | ||
For the month ended April 30, 2016 | ||
Particulars | Amount ($) | Amount ($) |
Cash flows from operating activities: | ||
Cash receipts from customers | (k) Â Â Â $750,000 | |
Cash payments for expenses and creditors | $387,500 | |
Net cash flow used for operating activities | (l) Â Â Â Â Â $362,500 | |
Cash flows from investing activities: | ||
Cash payment for acquisition of land | (m) ($150,000) | |
Cash flows from financing activities: | ||
Cash receipt of owner’s investment | (n)  $375,000 | |
Cash Withdrawals | (o) Â $125,000 | |
Net cash flow from financing activities | (p) Â $250,000 | |
Net Increase in cash, April 30,2016 cash balance | (q) Â $462,500 |
Table (4)
Working Notes:
Calculate the fees earned.
Calculate the supplies expense.
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