Question

Question 3 (35 points) On January 1, 2014. Travis Goodall organized a new company called Benson Inc. On the last day of that month, the company's records showed the items listed below. Use this information to prepare the January income statement and statement of changes in equity as well as the balance sheet at January 31 for Benson Inc. a) Complete the income statement using the format provided Building 126,500 (select one Cash 57,000 Income Statement Commissions earned (select one) Consulting revenue earned Dividends Interest earned Total revenues Interest expense Notes receivable Omice supplies expense 42.000 Total expenses Property taxes payable Rent earned 98,500 Share capital 79.500 b) Complete the statement of changes in equity using the format provided Short-term notes payable 76.000 (select one) Store supplies expense 45,000 Statement of Changes in Equity (select one) Share Retained Total Capital Earnings Equity c) Complete the Balance Sheet. (select one) Balance Sheet Select one) Assets Liabetes Total assets Total liabilities Equity Total equity Total liabilities and equity MacBook Pro

Answer 1

Benson Inc. Income Statement Month Ended January 31, 2014 Revenue Commissions earned $ 93,500 Consulting revenue earned $ 72,000 Interest earned 18,500 Rent earned $ 98,500 Total revenue Expenses Interest expense 24,000 Office supplies expense $ 42,000 Store supplies expense $ 45,000 Total expenses Net income $ 282,500 a $ $ $ 111,000 171,500 b a-b

Total Equity Beginning Balance Issuance of share capital Add: Net Income Less: Dividends Ending Balance Benson Inc. Statement of Changes in Equity Month Ended January 31, 2014 Share Capital Retained Earnings - $ 79,500 $ - $ 171,500 $ (12,000) $ | $ 79,500 $ 159,500 $ 79,500 171,500 (12,000) 239,000 |

• Retained earnings are the accumulated net income of the entity that is left after distribution to shareholders.
• The beginning balance of share capital and retained earnings are $0 since it is the first year of operation of the business.
• Therefore, the balance of $79,500 in share capital account is the share issued during the year.

Assets Cash Notes receivable Building $ 57,000 $ 167,000 $ 126,500 $ $ 35,500 76,000 Benson Inc. Balance Sheet As on January 31, 2014 Liabilities Property taxes payable Short-term notes payable Total liabilities Equity Share capital Retained earnings Total equity $ 350,500 Total liabilities and equity $ 111,500 $ 79,500 $ 159,500 $ 239,000 $ 350,500 Total assets