Question

The adjusted trial balance at October 31, 2018 is presented below for Van Houten Ltd VAN HOUTEN LTD Trial Balance October 31, 2018 Debit Credit Cash Accounts receivable Prepaid insurance Supplies Equipment Accumulated depreciation-equipment Building Accumulated depreciation-building Accounts payable Credit Card payable Bank loan payable Common shares Retained earnings (before Net Income) Service revenue Salaries expense Rent expense Insurance expense Utilities expense Travel expense Legal expense Interest expense Courier expense 5,200 70,100 19,100 2,150 34,000 1,700 81,785 8,179 39,200 42,600 37,100 69,500 13,700 113,300 58,099 25,200 13,100 6,650 4,500 3,745 1,500 150 Totals S325,279$325,279 Instructions Prepare an income statement and statement of financial position, all in classified form (i.e. show titles, subtotals, separate current vs long-term, etc.) for the year ended October 31, 2018.

Answer 1

Income statement

Service revenue	113,300
Less: Expenses
Salaries expense 58,099
Rent expense 25,200
Insurance expense 13,100
Utilities expense 6,650
Travel expense 4,500
Legal expense 3,745
Interest expense 1,500
Courier expense 150
Total expenses	- 112,944
Net income	356

Retained earnings, ending = Retained earnings, beginning + Net income

= 13,700 + 356

= $14,056

Balance sheet

Assets
Current assets
Cash	5,200
Accounts receivable	70,100
Prepaid insurance	19,100
Supplies	2,150
Total current assets	96,550
Property, plant and equipment
Equipment	34,000
Less: Accumulated depreciation	- 1,700
Building	81,785
Less; Accumulated depreciation	- 8,179
Net property, plant and equipment	105,906
Total assets	202,456
Liabilities and Stockholders' equity
Current liabilities
Accounts payable	39,200
Credit card payable	42,600
Total current liabilities	81,800
Long term liabilities
Bank loan payable	37,100
Stockholders' equity
Common shares	69,500
Retained earnings	14,056
Total stockholders' equity	83,556
Total liabilities and stockholders' equity	202,456

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