Financial Accounting Student Value Edition (5th Edition)
5th Edition
ISBN: 9780134728568
Author: Kemp
Publisher: PEARSON
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Chapter 1, Problem 39BP
Preparing the income statement and
Presented here are the amounts of Assets, Liabilities, Stockholders’ Equity, Revenues, and Expenses of The Fitness Guru, Inc., at August 31, 2018. The items are listed in alphabetical order.
| Accounts Payable................... | $15,000 | Interest Expense.................... | $ 5,000 | |
| 14,000 | Land....................................... | 37,000 | ||
| Advertising Expense............... | 15,000 | Note Payable.......................... | 70,000 | |
| Building.................................. | 135,000 | Property Tax Expense............ | 4,500 | |
| Cash....................................... | 16,000 | Rent Expense......................... | 22,000 | |
| Common Stock...................... | 70,000 | Salaries Expense.................... | 92,000 | |
| Dividends............................... | 29,000 | Salaries Payable..................... | 5,000 | |
| Equipment.............................. | 40,000 | Service Revenue.................... | 165,000 | |
| Insurance Expense................. | 2,200 | Supplies................................. | 1,400 |
The
Requirements
- 1. Identify each amount shown as an asset, liability, or stockholders' equity.
- 2. Prepare the company’s income statement and statement of retained earnings for the year ended August 31, 2018.
- 3. Prepare the company’s balance sheet at August 31, 2018.
- 4. Answer these questions about the company:
- a. What was the profit or loss for the year?
- b. What was the increase or decrease of retained earnings for the year?
- c. What is the amount of economic resources on August 31, 2018?
- d. What is the amount owed on August 31, 2018?
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Chapter 1 Solutions
Financial Accounting Student Value Edition (5th Edition)
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