Question

Longhorn Corporation provides low-cost food delivery services to senior citizens. At the end of the year on December 31, 2021, the company reports the following amounts: 

In addition, the company had common stock of $40,000 at the beginning of the year and issued an additional $4,000 during the year. The company also had retained earnings of $18,200 at the beginning of the year. 

Required:

 1 Prepare the income statement for Longhorn Corporation

 2. Prepare the statement of stockholders' equity for Longhorn Corporation

 3. Prepare the balance sheet for Longhorn Corporation

Answer 1

Solution:

1) Income Statement:

LONGHORN CORPORATION
Income statement
For the year ended Dec. 31, 2021
Revenue
Service Revenue	$                67,700
Total Revenue (A)	$                67,700
Operating Expenses
Cost of goods sold	$                53,400
Delivery expense	$                   2,600
Salaries and wages expense	$                   5,500
Total Operating Expense (B)	$                61,500
Non Operating(or) Other	$                            -
Net Income (A-B)		$    6,200

2) Statement of Stockholders` Equity

LONGHORN CORPORATION
Statement of Stockholders` Equity
For the year ended Dec. 31, 2021
	Common Stock	Retained Earnings	Total Stockholders` Equity
Beginning Balance	$                     40,000	$                    18,200	$                                     58,200
Additional Stock	$                        4,000		$                                        4,000
Net income	$                               -	$                       6,200	$                                        6,200
Ending Balance	$                     44,000	$                    24,400	$                                     68,400

3) Balance sheet

LONGHORN CORPORATION
Balance sheet
For the year ended Dec. 31, 2021
Assets
Current assets:
Cash	$          1,200
Supplies	$          3,400
Property,plant, and equipment:
Equipment	$        29,000
Building	$        40,000
Total Assets	$        73,600
Liabilities and stockholder's Equity
Current liabilities:
Salaries and Wages Payable	$              800
Accounts Payable	$          4,400
Owner`s Equity:
Common Stock	$        44,000
Retained Earnings	$        24,400
Total liabilities and stockholder's equity	$        73,600