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Cornerstones of Financial Accounti...

4th Edition
Jay Rich + 1 other
ISBN: 9781337690881

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Cornerstones of Financial Accounti...

4th Edition
Jay Rich + 1 other
ISBN: 9781337690881
Textbook Problem
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Problem 1-60B Income Statement and Balance Sheet

Ross Airport Auto Service provides parking and minor repair service at the local airport while customers are away on business or pleasure trips, The following account balances (except for retained earnings) are available for R055 Airport Auto Service at December 31, 2019.

Chapter 1, Problem 60BPSB, Problem 1-60B Income Statement and Balance Sheet Ross Airport Auto Service provides parking and

Required:

Prepare a single-step income statement and a classified balance sheet for the year ended December 31, 2019.

To determine

Concept Introduction:

Balance Sheet: The Balance sheet is a summary of Assets, Liabilities and equity accounts that reports the financial position of the business as on a specific date. Assets are further classifies into Current Assets, Long Term Investments, Plant Assets and Intangible assets. And Liabilities are further classified into Current Liabilities and Long term liabilities.

Income Statement:

Income Statement is the part of the financial statement which is prepared to calculate the net income earned by the organization. In the income statement, all expenses are subtracted from the revenues to calculate the net income. It is prepared for a particular period.

There are two ways to present and income statement: Single-step and Multi-step. In the, multi-step income statement the net income calculated after showing multiple steps. In this statement operating and items are separate from non operating items.

To Prepare:

The single step income statement and classified balance sheet.

Explanation

The single step income statement and classified balance sheet for are prepared as follows:

    Ross Airport Auto Service
    Single Step Income Statement
    For the year ended Dec. 31, 2019
    Revenues:  
    Service Revenue$431,100  
    Interest Revenue $4,100  
    Total Revenues (A) $435,200
    Less: Expenses:  
    Wages expense$246,100  
    Rent Expense$103,500  
    Depreciation Expense$12,450  
    Supplies Expense$36,900  
    Interest Expense$21,300  
    Income tax Expense$2,700  
    Total Expenses (B) $422,950
       
    Net Income (A-B) $12,250
    Ross Airport Auto Service
    Balance Sheet
    As on Dec...

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