Question

The following are the accounts of Global Inc.,

Accounts Payable $ 5,600

Accounts Receivable 7,500

Cash 55,700

Commissions Expense 215,000

Commissions Payable 21,700

Commission Sales Revenue 400,000

Common Stock 29,000

Dividends 33,000

Equipment 59,900

Income Taxes Expense 27,000

Income Taxes Payable 13,000

Marketing Expense 20,100

Office Rent Expense 36,000

Retained Earnings, Dec. 31, 2010 35,300

Supplies 700

Supplies Expense 2,600

Telephone and Computer Expenses 5,100

Wages Expense 42,000

Question A

Prepare the income statement, statement of retained earnings, and balance sheet forGlobal, Inc.

Answer 1

	INCOME STATEMENT
	Commission Sales Revenue		$400,000
	Expenses:
	Commissions Expense	$215,000
	Marketing Expense	$20,100
	Wages Expense	$42,000
	Office Rent Expense	$36,000
	Supplies Expense	$2,600
	Telephone and Computer Expenses	$5,100
	Total Expenses		$320,800
	Income Before Tax		$79,200
	Income Taxes Expense		$27,000
	Net Income		$52,200
	STATEMENT OF RETAINED EARNIMGS
	Retained Earnings, Dec. 31, 2010	$35,300
	Add: Net Income	$52,200
	Less: Dividend	$33,000
	Retained Earnings, Dec. 31, 2011	$54,500
	BALANCE SHEET
	Assets:
	Cash	$55,700
	Accounts Receivable	$7,500
	Supplies	$700
	Total Current Assets	$63,900
	Equipment	$59,900
	Total Assets	$123,800
	Liabilities:
	Accounts Payable	$5,600
	Income Taxes Payable	$13,000
	Commissions Payable	$21,700
	Total Liabilities	$40,300
	Shareholders Equity:
	Common Stock	$29,000
	Retained Earnings,	$54,500
	Total Equity	$83,500
	Total Liabilities and Shareholders Equity	$123,800