Question

The general ledger of Pipers Plumbing at January 1, 2021, includes the following account balances: Credits Debits $ 3,750 8,750 2,750 21,000 Accounts Cash Accounts Receivable Supplies Equipment Accumulated Depreciation Accounts Payable Utilities Payable Deferred Revenue Common Stock Retained Earnings Totals $ 5,000 3,000 4,000 15,500 8,750 $36,250 $36,250 The following is a summary of the transactions for the year: 1. January 24 Provide plumbing services for cash, $12,500, and on account, $57,500. 2. March 13 Collect on accounts receivable, 545,500. 3. May 6 Issue shares of common stock in exchange for $10,000 cash. 4. June 30 Pay salaries for the current year, $31,500. 5. September 15 Pay utilities of $4,000 from 2020 (prior year). 6. November 24 Receive cash in advance from customers, $7,000. 7. December 30 Pay $1,500 cash dividends to stockholders. nor current 1020 PESOS 37,000. for $10,000 $4,000 ft year, The following information is available for the adjusting entries. Depreciation for the year on the machinery is $5,000. Plumbing supplies remaining on hand at the end of the year equal $1,000. Of the $7,000 paid in advance by customers, $5,500 of the work has been completed by the end of the year. Accrued utilities at year-end amounted to $7,500.

Answer 1

Solution

Pipers Plumbing

Income Statement

Income Statement –

Pipers Plumbing
Income statement
For the year ended Dec 31, 2021
Revenues	$75,500
Less: Expenses
Salaries Expense	$31,500
Utilities Expense	$7,500
Depreciation Expense	$5,000
Supplies Expense	$1,750
Total Expenses	$45,750
Net Income	$29,750

	Pipers Plumbing
	Balance Sheet
	December 31, 2021
Assets		Liabilities
Current Assets:		Current Liabilities:
Cash	$41,750	Accounts Payable	$3,000
Accounts Receivable	$20,750	Utilities Payable	$7,500
Supplies	$1,000	Deferred Revenue	$1,500
Total Current Assets	$63,500	Total Current Liabilities	$12,000
Long-term Assets:		stockholders' equity
Equipment	$21,000	Common Stock	$25,500
Less: accumulated depreciation	($10,000)	Retained Earnings	$37,000
	$11,000
Total assets	$74,500	Total Liabilities	$74,500

Notes/Workings of balances –

Workings:
Cash -
Beginning balance	$3,750
Add: Service revenue	$12,500
accounts receivable	$45,500
Common shares	$10,000
Salaries Expense	($31,500)
Utilities expense	-4,000
unearned revenue	$7,000
Cash dividends	($1,500)
Cash balance - ending	$41,750
Supplies - beginning balance	$2,750
Less: Ending balance	($1,000)
Supplies Expense	$1,750
Accumulated Depreciation -
Beginning balance	$5,000
Add: Depreciation expense	$5,000
Ending balance	$10,000
Unearned Revenue -
Advance received	$7,000
Less: service recognized and billed	$5,500
Balance	$1,500
Service Revenue -
Cash collections	$12,500
credit sales	$57,500
Earned portion of advance received	$5,500
Total	$75,500
Accounts Receivable -
Beginning balance	$8,750
Add: Credit sales	$57,500
	$66,250
Less: cash collected	($45,500)
Ending balance	$20,750

Retained earnings:

Beg. Balance   $8,750

Add: net income         $29,750

Total   $38,500

Less: dividends paid $1,500

Retained earnings, ending balance $37,000

Common stock –

Beg. Balance   $15,500

Add: new issue           $10,000

Ending balance = $25,500