College Accounting (Book Only): A Career Approach
College Accounting (Book Only): A Career Approach
12th Edition
ISBN: 9781305084087
Author: Cathy J. Scott
Publisher: Cengage Learning
bartleby

Videos

Textbook Question
Chapter 2, Problem 5PB

The financial statements for Baker Custom Catering for the month of April are presented below.

Chapter 2, Problem 5PB, The financial statements for Baker Custom Catering for the month of April are presented below.

Required

Solve for the missing information.

Expert Solution & Answer
Check Mark
To determine

Solve the missing information.

Answer to Problem 5PB

(a) For the year ended April 30.

(b) $2,440.

(c) Company B

(d) For the year ended April 30

(e) 5,000.

(f) 9,560.

(g) 13,560.

(h) For the year ended April 30.

(i) 14,800.

(j) 13,560.

(k) 14,800.

Explanation of Solution

Financial statement:

Financial statements are condensed summary of transactions communicated in the form of reports for the purpose of decision making. The financial statements reports, and shows the financial status of the business. The financial statements consist of the balance sheet, income statement, statement of retained earnings, and the cash flow statement.

Missing information (a):

In this case, information regarding “Period of time” (For the year ended April 30) is missing in the income statement.

Company B
Income Statement
(a) For the year ended April 30

Table (1)

Missing information (b):

The amount of total expense is missing in the income statement and it is calculated by adding all expenses:

Company B
Income Statement
(a) For the year ended April 30
ParticularsAmount ($)Amount ($)
Revenue:  
Professional Fees 12,000
Expenses:  
Salary Expense800 
Rent Expense1,200 
Utilities Expense360 
Miscellaneous Expense80 
Total Expenses (b) 2,440
Net income 9,560

Table (2)

Therefore, the amount of total expenses is (b) $2,440.

Missing information (c):

In this case, “Name of the Company “(Company B) is missing in the statement of owners’ equity.

(c) Company B
Statement of Owners' equity
 (d) For the year ended April 30

Table (3)

Missing information (d):

In this case, information regarding “Period of time” (For the year ended April 30) is missing in the statement of owners’ equity.

(c) Company B
Statement of Owners' equity
 (d) For the year ended April 30

Table (4)

Missing information (e):

In this case, investments made during the month of April are missing and it is calculated as follows:

(c) Company B
Statement of Owners' equity
 (d) For the year ended April 30
ParticularsAmount($)Amount($)
Person Capital, April 1  
Investments during April (1) (e) 5,000 
Net income for April (f) 9,560 
Subtotal 14,560

Table (5)

Therefore, the amount of investments during April are (e) $5,000.

Working note:

(1) Calculate the amount of investment made during April:

InvestmentsduringApril=Subtotal(f)NetincomeforApril=$14,560$9,560=$5,000

Missing information (f):

In this case, the net income mentioned in the income statement is recorded in the statement of owners’ equity. Therefore, amount of net income is (f) $9,560. The net income or net loss computed in the income statement is reported in the statement of owners’ equity for ascertaining the amount of ending capital balance.

(c) Company B
Statement of Owners' equity
 (d) For the year ended April 30
ParticularsAmount($)Amount($)
Person Capital, April 1  
Investments during April (1) (e) 5,000 
Net income for April (f) 9,560 
Subtotal 14,560

Table (6)

Missing information (g):

In this case, the amount of increase in capital is (g) $13,560 and it is same as the Ending capital of Person L as on April 30, since the amount of beginning capital is given as zero. Suppose, If the amount of beginning capital is given, then the increase in capital is computed by deducting the ending capital from the beginning capital.

(c ) Company B
Statement of Owners' equity
 (d) For the year ended April 30
ParticularsAmount($)Amount($)
Person Capital, April 1  
Investments during April (e) 5,000 
Net income for April (f) 9,560 
Subtotal14,560 
Less: Withdrawals for April1,000 
Increase in capital (g) 13,560
Person L, Capital, April 30 13,560

Table (7)

Note:

The net income or net loss computed in the income statement is reported in the statement of owners’ equity for ascertaining the amount of ending capital balance. Then, the balance of ending capital is reported in the balance sheet (owners’ equity section). Therefore, any transaction affecting the income statement eventually, affects the balance sheet through the balance of owners’ equity.

Missing information (h):

In this case, information regarding “Period of time” (For the year ended April 30) is missing in the balance sheet.

Company B
Balance Sheet
(h) For the year ended April 30

Table (8)

Missing information (i):

In this case, the amount of total assets is missing and it is calculated as follows;

Company B
Balance Sheet
(h) For the year ended April 30
AssetsAmount ($)Amount ($)
Cash8,000 
Accounts receivable800 
office Equipment4,000 
Office Furniture2,000 
Total Assets (i) 14,800

Table (9)

Therefore, the amount of total asset is (i) 14,800.

Missing information (j):

In this case, the amount of Person L, Capital is (j) $13,560 and it is the same as the amount of ending capital of Person L that is calculated in the statement of owners’ equity.

Company B
Balance Sheet
(h) For the year ended April 30
AssetsAmount ($)Amount ($)
Cash8,000 
Accounts receivable800 
office Equipment4,000 
Office Furniture2,000 
Total Assets (i) 14,800
   
Liabilities  
Accounts Payable 1,240
   
Owners' Equity  
Person L, Capital (j) 13,560

Table (10)

Note:

The net income or net loss computed in the income statement is reported in the statement of owners’ equity for ascertaining the amount of ending capital balance. Then, the balance of ending capital is reported in the balance sheet (owners’ equity section). Therefore, any transaction affecting the income statement eventually, affects the balance sheet through the balance of owners’ equity.

Missing information (k):

In this case, the amount of total liabilities and owners’ equity is same as the amount of total assets ($14,800) and it is calculated as follows:

Company B
Balance Sheet
(h) For the year ended April 30
AssetsAmount ($)Amount ($)
Cash8,000 
Accounts receivable800 
office Equipment4,000 
Office Furniture2,000 
Total Assets (i) 14,800
   
Liabilities  
Accounts Payable 1,240
   
Owners' Equity  
Person L, Capital (j) 13,560
Total liabilities and owners’ equity (2) (k)14,800

Table (11)

Working note:

(2) Calculate the amount of total liabilities and owners’ equity:

Totalliabilitiesandowners'equity}=Accountspayable+PersonL,capital=$1,240+$13,560=$14,800

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!
Students have asked these similar questions
The following data for the current year ended June 30 are from the accounting records of Zanadu Co.: Administrative expenses $28,750 Cost of goods sold 181,440 Interest expense 3,600 Rent revenue 1,500 Sales 534,440 Selling expenses 65,000     Required:   Prepare a multiple-step income statement for the year ended June 30. Refer to the lists of Accounts in the information given, Labels, and Amount Descriptions for the exact wording of the answer choices for text entries. Negative amounts should be entered with a minus sign. Be sure to complete the statement heading.
The Redford company presented the balances for some of its selected accounts for the month of September as shown in the table that follows.   Compute Net Income for Redford Inc. for the month of September 2018. Rent Expense                  $   3,600 Salaries Expenses $   1,600 Interest Expense $     600 Service Revenue $     7,200 Cleaning expense $       200   Group of answer choices $ 1,200 $ 2,000 $ 8,400 $ 2,800
Please answer all questions with explanations. Determine the amounts of the missing items, identifying them by letter. Prepare On Company’s Income statement for December. Enter all amounts as positive numbers. Thx

Chapter 2 Solutions

College Accounting (Book Only): A Career Approach

Knowledge Booster
Accounting
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Similar questions
  • The financial statements for Daniels Custom Haircuts for the month of October follow. Required Solve for the missing information.
    The transactions completed by AM Express Company during March, the first month of the fiscal year, were as follows: Instructions 1. Enter the following account balances in the general ledger as of March 1: 2. Journalize the transactions for March, using the following journals similar to those illustrated in this chapter: single-column revenue journal (p. 35), cash receipts journal (p. 31), purchases journal (p. 37, with columns for Accounts Payable, Maintenance Supplies, Office Supplies, and Other Accounts), cash payments journal (p. 34), and twocolumn general journal (p. 1). Assume that the daily postings to the individual accounts in the accounts payable subsidiary ledger and the accounts receivable subsidiary ledger have been made. 3. Post the appropriate individual entries to the general ledger. 4. Total each of the columns of the special journals and post the appropriate totals to the general ledger; insert the account balances. 5. Prepare a trial balance.
    The following accounts appear in the ledger of Celso and Company as of June 30, the end of this fiscal year. The data needed for the adjustments on June 30 are as follows: ab.Merchandise inventory, June 30, 54,600. c.Insurance expired for the year, 475. d.Depreciation for the year, 4,380. e.Accrued wages on June 30, 1,492. f.Supplies on hand at the end of the year, 100. Required 1. Prepare a work sheet for the fiscal year ended June 30. Ignore this step if using CLGL. 2. Prepare an income statement. 3. Prepare a statement of owners equity. No additional investments were made during the year. 4. Prepare a balance sheet. 5. Journalize the adjusting entries. 6. Journalize the closing entries. 7. Journalize the reversing entry as of July 1, for the wages that were accrued in the June adjusting entry. Check Figure Net income, 14,066
  • Daube Industries’ operations for the month of October are summarized as follows:   Provided $6,200 of services on account. Received $3,400 cash for services provided in October. Received $1,800 cash for services to be provided in November. Received $4,400 cash for service provided in September and billed in September. Paid September’s warehouse rental bill on account in the amount of $1,300. Received October’s rental bill of $1,400 which will be paid in November. Required:  Prepare journal entries to record the transactions identified among activities (A) through (F). (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.) Did I do this correctly? If not please explain why.
    Use the following information for the Exercises below. (Algo) Skip to question   [The following information applies to the questions displayed below.] M&R Company provided $3,300 in services to customers in December, which are not yet recorded. Those customers are expected to pay the company in January following the company’s year-end. Wage expenses of $2,300 have been incurred but are not paid as of December 31. M&R Company has a $6,300 bank loan and has incurred (but not recorded) 7% interest expense of $441 for the year ended December 31. The company will pay the $441 interest in cash on January 2 following the company’s year-end. M&R Company hired a firm that provided lawn services during December for $630. M&R will pay for December lawn services on January 15 following the company’s year-end. M&R Company has earned $330 in interest revenue from investments for the year ended December 31. The interest revenue will be received on January 15 following the…
    On December 31, 2018, the balances of the accounts appearing in the ledger of Home City Furnishings Company, a furniture wholesaler, are as follows: Rent revenue $12,000   Sales $3,250,000 Accounts receivable 500,000   Cash 530,000 Administrative Expenses 200,000   Cost of Merchandise Sold 1,600,000 Selling Expenses 250,000   Interest expense 6,000   Prepare a multi-step income statement for the year ended December 31, 2018.   Home   City Furnishings Company Income   Statement December 31, 2018 Sales                 Less Operating Expenses:                             Other Revenue and Expense:                 Net Income
    • SEE MORE QUESTIONS
    Recommended textbooks for you
  • College Accounting (Book Only): A Career Approach
    Accounting
    ISBN:9781337280570
    Author:Scott, Cathy J.
    Publisher:South-Western College Pub
    Principles of Accounting Volume 1
    Accounting
    ISBN:9781947172685
    Author:OpenStax
    Publisher:OpenStax College
    Century 21 Accounting General Journal
    Accounting
    ISBN:9781337680059
    Author:Gilbertson
    Publisher:Cengage
  • Century 21 Accounting Multicolumn Journal
    Accounting
    ISBN:9781337679503
    Author:Gilbertson
    Publisher:Cengage
    College Accounting, Chapters 1-27
    Accounting
    ISBN:9781337794756
    Author:HEINTZ, James A.
    Publisher:Cengage Learning,
    Financial Accounting
    Accounting
    ISBN:9781305088436
    Author:Carl Warren, Jim Reeve, Jonathan Duchac
    Publisher:Cengage Learning
  • College Accounting (Book Only): A Career Approach
    Accounting
    ISBN:9781337280570
    Author:Scott, Cathy J.
    Publisher:South-Western College Pub
    Principles of Accounting Volume 1
    Accounting
    ISBN:9781947172685
    Author:OpenStax
    Publisher:OpenStax College
    Century 21 Accounting General Journal
    Accounting
    ISBN:9781337680059
    Author:Gilbertson
    Publisher:Cengage
    Century 21 Accounting Multicolumn Journal
    Accounting
    ISBN:9781337679503
    Author:Gilbertson
    Publisher:Cengage
    College Accounting, Chapters 1-27
    Accounting
    ISBN:9781337794756
    Author:HEINTZ, James A.
    Publisher:Cengage Learning,
    Financial Accounting
    Accounting
    ISBN:9781305088436
    Author:Carl Warren, Jim Reeve, Jonathan Duchac
    Publisher:Cengage Learning
    IAS 29 Financial Reporting in Hyperinflationary Economies: Summary 2021; Author: Silvia of CPDbox;https://www.youtube.com/watch?v=55luVuTYLY8;License: Standard Youtube License