Question

The following information is available for two different types of businesses for the 2018 accounting year. Hopkins CPAs is a service business that provides accounting services to small businesses. Sports Clothing is a merchandising business that sells sports clothing to college students. Data for Hopkins CPAS 1. Borrowed $39,000 from the bank to start the business. 2. Provided $39,000 of services to clients and collected $39,000 cash. 3. Paid salary expense of $25,000. Data for Sports Clothing 1. Borrowed $39,000 from the bank to start the business. 2. Purchased $28,000 inventory for cash. 3. Inventory costing $23,500 was sold for $42,000 cash. 4. Paid $3,400 cash for operating expenses.

Answer 1

* HOPKINS CPA Income statement Revenue Sercoice cevenue $ 39,000 expenses Salaves expenses $ 25,000 Net Income $ 14,000 Balance sheet asg Dec 31, 2018 Assets Cash $53,000 Potal assets $ 53,000 liabiutiu long term borrowing - $39.000 Total liabiliti $39,000 share hardu's quit P904 lors Ale $14000 Totou shou holder's equits - $14.000 Tolai liabilities and Share hadeu equity $53,000

Statement of cash floor Cash Hoco -com operating activities operating income $ 39,000 Palau exp paid - -$25,000 Net cash Hoco hom opulating activités $ 14,000 cash How Hom investing activities cash flow from financing activitie long tum bouocoings - $39,000 Ner cash How Hom tinancing activiti $39.000 opening ouh balance Ending cash Balance $531000 * Sports Clothing Sales $ 42,000 $ 23,500 Dek! cost of goods sold - Gross puotit - $ 18,500 Expenses: operating expense - $ 3,400 Net Pncome $ 15,100

Balance sheet as of December 31, 2018 Assels - cash - - $ 49,600 $ 4,500 - Inventory $ 54,100 Total Assets liabilities - long term borbowigs - $39.000 $391000 Fotou liabilities share holder's Equity Pofit and loss Total Shoucholder's equit 15,100 $ 15,100 Total liabilete and equity $ 54,100

Sotement of cash flows for the year Ended Dec 31, 2016 Cash flow from opening Activities Revenu Hom sale - $18,000 Puchoje o Pnvertou - -$29.000 Operating expenses - - $ 8400 net cash Hoco tom Opeichting Activites $10.600 cach flow hom investering Activities. caun How Hom inanang Activities - long term toucwing - $39.000 Net cash How hom dinanang betevit $89,000 opening coun Balance ending cash Balance $ 49,600,