Question

Requirement:

Complete practice M4-8 from the handout (slides 43-44) by filling out the balance sheet and income statement templates below. Read slide # 42 from the handout before you start. ROMNEY'S MARKETING COMPANY Balance Sheet December 31, 2017 ASSETS LIABILITIES AND STOCKHOLDERS' EQUITY Current Assets: Cash Accounts receivable Interest receivable Prepaid insurance Total Current Assets Notes receivable Current Liabilities: Accounts payable Accrued expenses payable Income taxes payable Unearned rent revenue Total Current Liabilities Total Liabilities Stockholders' Equity: Common Stock Additional Paid-in Capital Retained Earnings Total Stockholders' Equity Total Liabilities and Stockholders' Equity: Equipment, net Total Assets

P42:

P43:

P44:

Answer 1

Prepare Income statement as follows:

ROMNEY'S MARKETING COMPANY Income Statement For the Year ended December 31, 2017 Revenues Sales revenue $38,500 Rent revenue $800 Total Revenue $39,300 Less: Cost of revenues: Wage expenses Depreciation expense Rent expense Utilities expense Total cost of revenues Gross profit $19,500 $1,800 $9,000 $380 $30.680 $8,620 Less:Operating expenses Insurance expense Total operating expenses $750 $750 Income from operations Add: Interest income Income before taxes Income tax expense Net inome $7,870 $100 $7,970 ($2,700) $5,270

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Prepare Balance Sheet as follows:

ASSETS Current Assets: Cash Accounts receivable Interest receivable Prepaid insurance Total Current Assets Notes receivable (long term) Equipment, net ($15,290-$3000) ROMNEY'S MARKETING COMPANY Balance Sheet December 31, 2017 LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities: $1,500 Accounts payable $2,200 Accrued expenses payable $100 Income taxes payable $1.600 Unearned rent revenue $5,400 Total Current Liabilities $2.800 Total liabilities $12,290 Stockholders' equity: Common stock Additional paid-in capital Retained earnings ($2000+$5270) Total stockholders' equity $20.490 Total Liabilities and stockholders' equity $2.400 $3.920 $2,700 $500 $9.520 $9,520 $80 $3,620 $7.270 $10.970 $20.490 Total Assets