Question

PR 1-2B Financial statements Obj. 5 The assets and liabilities of Wilderness Travel Service on April 30, 20Y7, and its revenue and expenses for the year are as follows: Accounts payable $ 25,000 Rent expense $ 75,000 Accounts receivable 210,000 Supplies 9,000 Cash 156,000 Supplies expense 12,000 Common stock 35,000 Taxes expense 10,000 Fees earned 875,000 Utilities expense 38,000 Miscellaneous expense 15,000 Wages expense 525,000 Common stock was $25,000 and retained earnings was $155,000 as of May 1, 20Y6. During the year. additional common stock of $10,000 was issued for cash, and dividends of $10,000 were paid. ATE Instructions 1. Prepare an income statement for the year ended April 30, 2017 2. Prepare a statement of stockholders' equity for the year ended April 30, 20Y7 3. Prepare a balance sheet as of April 30, 20Y7. 4. What item appears on both the income statement and statement of stockholders' equity!

Answer 1

Requirement 1:

Wilderness Travel Service
Income Statement
For the year ended April 30,20Y7
Revenues:
Fees earned		$875,000
Expenses:
Rent expense	$75,000
Utilities expense	$38,000
Wages expense	$525,000
Supplies expense	$12,000
Taxes expense	$10,000
Miscellaneous expense	$15,000
Total Expense		$675,000
Net income		$200,000

Requirement 2:

	Common stock	Retained Earnings	Totals
Balance May 1,20Y6	$25,000	$155,000	$180,000
Additional Common stock	$10,000		$10,000
Net income		$200,000	$200,000
Cash dividends		($40,000)	($40,000)
Balance April 30,20Y7	$35,000	$315,000	$350,000

Requirement 3:

Wilderness Travel Service
Balance Sheet
As of April 30,20Y7
Assets		Liabilities
Cash	$156,000	Accounts payable	$25,000
Accounts receivable	$210,000
Supplies	$9,000	Stockholders'Equity
		Common stock	$35,000
		Retained Earnings	$315,000
Total Assets	$375,000	Total liabilities and stockholder's equity	$375,000

Requirement 4:

Net income appears on both the income statement and statement of stockholders' equity