Question

QUESTION 3:

Holy cross Industries perform adjusting entries every month, but close its accounts only at year end. The Agency’s year –end adjusted Trial Balance dated December 31, 2018, appears below.

DATA

Accounts Payable	57,000
Accounts Receivable	34,000
Building	255,000
Cash	15,000
Equipment	76,000
Loan from bank	320,000
Prepaid Expenses	12,000
Sales	123,000
Salary Expense	22,000
Utility Expense	8,000
Long-term liability	35,000
Trademarks	6,000
Short-term Notes Payable	44,000
Interest Expenses	4,500
Inventory	82,000
Cost of Goods Sold	62,000
Income Tax Expense	4,500

Prepare an Income Statement for the year ended December 31, 2018. Also prepare Holy cross Industries balance sheet dated December 31, 2018.
B. ‘The finance department of an enterprise performs several functions in order to achieve the objectives. The scope of finance is very wide.’

Answer 1

Income Statement for the year 2018
Revenue
Sales	123,000 $
Total (A)	123,000 $
Expenses
Cost of Goods Sold	62,000 $
Salary Expenses	22,000 $
Utility Expenses	8,000 $
Interest expenses	4,500 $
Total (B)	96,500 $
Net Income before tax	26,500 $
Less:- Taxes payable	(4,500) $
Net income after taxes	22,000 $

Balance Sheet for the year ended 2018
Assets
Non Current Asset
Equipment	76,000
Building	255,000
Trademark	6,000
Current Asset
Accounts receivable	34,000
Prepaid Rent	12,000
Cash	15,000
Inventory	82,000
Total	480,000
Equity & Liabilities
Equity
Capital	2,000
Retained Earnings	22,000
Non Current liabilities
Loan from bank	320,000
Long term liability	35,000
Current liabilities
Accounts payable	57,000
Short term notes payable	44,000
Total	480,000