Question

These financial statement items are for Rugen Company at year-end, July 31, 2016. (20 pts Salaries and wages payable $ 2,980 Notes payable (long-term) $ 3,000 Salaries and wages expense 45,700 Cash 5,200 utilities expense 21,100 Accounts receivable 9,730 Suipment 38,000 Accumulated depreciation 5,000 A unts payable 4,100 Owner's Drawings 4,000 Service revenue 57,200 Depreciation expense 4,000 Rent revenue 6,500 Owner's capital (beginning 48,000 of the year) Instructions a) Prepare an income statement and an owner's equity statement for the year. The owner did not make any new investments during the year. Prepare a classified balance sheet at July 31.

Answer 1

(a) Income Statement and Owner's equity statement is as prepared below:

Rugen Company
Income Statement
For the Year Ended July 31, 2016
Particulars	Amount ($)	Amount ($)
Service Revenue	57,200
Rent Revenue	6,500
Total Revenue		63,700
Less: Expenses
Salaries and Wages Expense	45,700
Utilities Expense	21,100
Depreciation Expense	4,000
Total Expenses		70,800
Net Income		-7,100

Rugen Company
Statement of owner's equity
For the Year Ended July 31, 2016
Particulars	Amount ($)	Amount ($)
Owner's Capital		48,000
Add:
Net income	7,100
Less:
Owner's drawing	4,000
Closing capital, July 31		36,900

(b) Classified Balance Sheet

Rugen Company
Balance Sheet
As at July 31, 2016
Particulars	Amount ($)	Amount ($)
ASSETS
Current Assets:
Cash	5,200
Account Receivable	9,780
Total Current Assets		14,980
Equipment	38,000
Acc dep- Equipment	-6,000	32,000
Total Assets		46,980
LIABILITIES AND STOCKHOLDERS EQUITY
Liabilities :
Current Liabilities
Salaries and Wages Payable	2,980
Accounts Payable	4,100
Total Current Liabilities		7,080
Notes Payable		3,000
Total Stockholders' Equity
Owner's capital		36,900
Total Stockholders' Equity		36,900
Total Liabilities and stockholders’ equity		46,980