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PR 1-2 B Financial statements The assets and liabilities of Wilderness Travel Service on April 30, 20Y7, and its revenue and expenses for the year are as follows: Accounts payable $ 25,000 Rent expense $ 75,000 Accounts receivable 210,000 Supplies 9,000 Cash 156,000 Supplies expense 1Z000 Common stock 35,000 Taxes expense 10,000 Fees earned 875,000 Utilities expense 38,000 Miscellaneous expense 15,000 Wages expense 525,000 Common stock was 525,000 and retained earnings was $155,000 as of May 1, 20Y6. During the year, additional common stock of $10,000 was issued for cash, and dividends of $40,000 were paid. Instructions 1. Prepare an income statement for the year ended April 30, 20Y7. 2. Prepare a statement of stockholders’ equity for the year ended April 30, 20Y7. 3. Prepare a balance sheet as of April 30, 20Y7. 4. What item appears on both the income statement and statement of stockholders' equity?

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Financial And Managerial Accounting

15th Edition
WARREN + 1 other
Publisher: Cengage Learning,
ISBN: 9781337902663

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Chapter
Section
BuyFindarrow_forward

Financial And Managerial Accounting

15th Edition
WARREN + 1 other
Publisher: Cengage Learning,
ISBN: 9781337902663
Chapter 1, Problem 2PB
Textbook Problem
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PR 1-2 B Financial statements

The assets and liabilities of Wilderness Travel Service on April 30, 20Y7, and its revenue and expenses for the year are as follows:

Accounts payable $ 25,000 Rent expense $ 75,000
Accounts receivable 210,000 Supplies 9,000
Cash 156,000 Supplies expense 1Z000
Common stock 35,000 Taxes expense 10,000
Fees earned 875,000 Utilities expense 38,000
Miscellaneous expense 15,000 Wages expense 525,000

Common stock was 525,000 and retained earnings was $155,000 as of May 1, 20Y6. During the year, additional common stock of $10,000 was issued for cash, and dividends of $40,000 were paid.

Instructions

1. Prepare an income statement for the year ended April 30, 20Y7.

2. Prepare a statement of stockholders’ equity for the year ended April 30, 20Y7.

3. Prepare a balance sheet as of April 30, 20Y7.

4. What item appears on both the income statement and statement of stockholders' equity?

1.

To determine

Prepare the income statement for Company WTS for the year ended April 30, 20Y7.

Explanation of Solution

Income statement: The financial statement which reports revenues and expenses from business operations and the result of those operations as net income or net loss for a particular time period is referred to as income statement.

Prepare the income statement for Company WTS for the year ended April 30, 20Y7:

The income statement for Company WTS for the year ended April 30, 20Y7, is below.

Company WTS
Income Statement
For the year ended April 30, 20Y7
ParticularsAmount ($)Amount ($)
Re...

2.

To determine

Prepare the statement of stockholder's equity for Company WTS for the year ended April 30, 20Y7.

3.

To determine

Prepare the balance sheet for Company WTS as on April 30, 20Y7.

4.

To determine

Identify the items that appear on both the income statement and the statement of stockholder's equity.

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Financial And Managerial Accounting
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