Question

Exercise 4-6 (Part Level Submission) Ivanhoe Company, a ski tuning and repair shop, opened on November 1, 2016. The company carefully kept track of all its cash receipts and cash payments. The following information is available at the end of the ski season, April 30, 2017. Cash Cash Receipts Payments Issuance of common shares $18,200 Payment to purchase repair shop equipment $9,100 Payments to landlord 1,295 Newspaper advertising payment 390 Utility bill payments 885 Part-time helper's wage payments 2,750 Income tax payment 11,200 Cash receipts from ski and snowboard repair services 30,400 Subtotals 48,600 25,620 Cash balance 22,980 Totals $48,600 $48,600 The repair shop equipment was purchased on November 1 and has an estimated useful life of 5 years. Lease payments to the landlord are made at the beginning of each month. The amount of the payments to the landlord shown above includes a one-time security deposit of $185. The part-time helper is owed $375 at April 30, 2017, for unpaid wages. At April 30, 2017, customers owe Ivanhoe Company $540 for services they have received but have not yet paid for.

Answer 1

$30,940 IVANHOE COMPANY Income Statement For the Six Months Ended April 30, 2017 Revenues Service Revenue Expenses Income Tax Expense $11.200 Salaries and Wages Expense $ 3,125 Utilities Expense $ 885 Advertising Expense $ 390 Rent Expense $ 1,110 Depreciation Expense $ 910 Total Expense Net Income / (Loss) $17.620 $13,320 Working Notes: Service Revenue = $30,400+$540 = $30,940 Salaries and Wages Expense = $2,750+$375 = $3,125 Rent Expenses = $1,295-$185 = $1,110 Depreciation Expense = ($9,100-$0)/5*6/12 = $910