Question

t accts, balance sheet, income statement, statement of owners equity please

An extra problem, not homework unless specifically assigned January 1, 2020...We formed a corporation, Hot Dogs, Inc., and you and everyone class invested $100 each in our venture. Everyone got one share of stock for that investment. Assume there are 90 of us. We elected a Board of Directors, a COO and we start to do business. First we borrowed $10,000 from the bank and bought a new cart for that amount. The loan carries an 8% interest rate. During the year we bought 15,000 dogs and 15,000 buns. Dogs cost. 15 and buns are .05 each. For our first year, we sold 14,000 dogs for $2 each. We paid our worker $7,200, paid office expenses of $3,600 and $800 for interest. On September 30 we sold 20 more shares for $300 each. At the end of the year we owed our worker $100. The tax rate is 30% and we will pay our taxes next year. How did we do? Are we rich yet? Was it a good investment?

Answer 1

Ans: To Check How we did, we need to prepare Income Statement:

Income Statement

Expenses	Amount	Income	Amount
Interest	800	Sale of Hot Dogs	28000
Purchase of Dogs	2250
Purchase of Buns	750
Salary (including 100 payable)	7300
Office Expense	3600
Tax Payable @30% on Earning	3990
Retained Earning	9310
Total	28000	Total	28000

Ans: Balance Sheet is given below, to Answer question "Are we rich"-(Assuming Sales happened in Cash)

Liabilities	Amount	Assets	Amount
Stock	11000	Cash Account	38400
Stock Premium	4000
Retained Earning	9310
Loan	10000
Salary Payable	100
Tax Payable	3990
Total	38400	Total	38400

Cash Account

Receipt	Amount	Payment	Amount
Share Capital	9000	Interest	800
Loan	10000	Purchase of Dogs	2250
Sale Proceed	28000	Purchase of Buns	750
Share Capital	2000	Salary	7200
Share Premium	4000	Office Expenses	3600
		Balance	38400
Total	53000	Total	53000