Question

These financial statement items are for Crane Company at year-end, July 31, 2022. Salaries and wages payable $ 4,000 Salaries and wages expense 58,900 Supplies expense 16,800 Equipment 15,300 Accounts payable 4,000 Service revenue 67,500 Rent revenue 9,700 Notes payable (due in 2025) 3,000 Common stock 16,000 Cash 37,000 Accounts receivable 11,000 Accumulated depreciation-equipment 7,700 Dividends 4,000 Depreciation expense 4,000 Retained earnings (beginning of the year) 35,100

Answer 1

First we will prepare the income statement as below:

Income Statement:

Description	Amount
Revenues & other items:
Service revenue	67500
Rent revenue	9700
Total revenues & other items	77200
Expenses & other items:
Salaries & wages expense	58900
Supplies expense	16800
Depreciation expense	4000
Total expenses & other items	(79700)
Net loss	(2500)

Next we will prepare retained earnings statement:

Retained earnings statement:

Description	Amount
Beginning retained earnings	35100
Less: Net loss	(2500)
Less: Dividends	(4000)
Ending retained earnings	28600

Now, we will prepare the Balance sheet as per below:

Description	Amount	Amount
Assets:
Current assets:
Cash	37000
Accounts receivable	11000
Total current assets		48000
Non current assets:
Equipment	15300
Less: Accumulated depreciation	(7700)	7600
Total assets		55600
Liabilities & stockholder's equity:
Current liabilities:
Accounts payable	4000
Salaries & wages payable	4000
Total current liabilities		8000
Non current liabilities:
Notes payable		3000
Shareholder's equity:
Common stock	16000
Retained earnings	28600
Total shareholder's equity		44600
Total liabilities & shareholder's equity		55600