Question

The Brown Consulting Group is a financial planning services firm owned and operated by Nicholas Brown. As of December 31, 2018, the end of the year, the accountant, for the Brown Consulting Group, prepared an adjusted trial balance as follows: Brown Consulting Group Adjusted Trial Balance December 31, 2018 CREDIT DEBIT $11,000 28,150 6,350 9,500 75,000 250,000 117,200 240,000 Account Title Cash Accounts Receivable Supplies Prepaid Insurance Land Buildings Accumulated Depreciation-Buildings Equipment Accumulated Depreciation-Equipment Accounts Payable Salaries Payable Unearned Rent Common Stock Retained Earnings Dividends Service Fees Rent Revenue Salaries Expense Depreciation Expense-Equipment Rent Expense Supplies Expense Utilities Expense Depreciation Expense-Buildings Repairs Expense Insurance Expense Miscellaneous Expense 151,700 33,300 3,300 1,500 25,000 195,000 20,000 468,000 5,000 291,000 17,500 15,500 9,000 8,500 6,600 3,450 3,000 5,450 1,000,000 1,000,000 Please prepare the following financial statements: 1. Income Statement - 10 points 2. Statement of Retained Earnings - 20 points 3. Balance Sheet - 20 points

Answer 1

Amounts 468,000 5,000 473,000 291,000 Brown conulting group Income statement for period ended 31st December 2018 - Particulars Revenue : Service Revenue Add: Rent Revenue Total Revenue Less : Expenses Salaries expenses Depreciation expense - Equipment Rent expense Supplies expense Utilities expense Depreciation expense - Building Repairs expense Insurance expense Miscellaneous expense Total Expenses Net Income 17,500 15,500 9,000 8,500 6,600 3,450 3,000 5,450 360,000 113,000 Amounts Retained earnings account as at 31st December 2018 Particulars Opening balance Add; Net Income 195,000 113,000 308,000 (20,000) Les: Dividends Closing balance of Retained Earnings 288,000

Amounts 33,300 3,300 1,500 38,100 In the Books of Brown conulting group Classified statement of Financial Position as at December 31, 2018 :- Assets Amount $ Liabilities and Shareholders Equity Current Assets : Current Liabilities : Cash 11,000 Accounts Payable Accounts Receivable 28,150 Salaries Payable Supplies 6,350 Unearned Rent Prepaid Insurance 9,500 Total Current Liabilities (A) Total Current Assets (A) 55,000 Non-Current Assets: Property, Plant and Equipment Land 75,000 Building 250,000 Shareholders Equity :- Less: Accumulated Depreciation - Building (117,200) Common stock Equipment 240,000 Retained earnings Less: Accumulated Depreciation - Equipment (151,700) Net Fixed Assets (B) 296,100 Total Shareholders Equity (B) 25,000 288,000 313,000 Total Assets (A+B) 351,100 Liabilities and Shareholders Equity (A+B) 351,100