Question

Please show the steps you took when finding the calculations;

Answer 1

Hey,

Please find enclosed solution. Hope this helps. In case of any doubt please comment on solution.

Thank you.

SOLUTION

In case of questions like these I always prefer to make a Balance Sheet as well. This serves two purposes. Firstly it helps me ascertain if I have the question correctly (if yes, the balance sheet will tally). Also, this helps me to work out the sum faster since for every item I go through I make a note of whether the item will affect the Balance Sheet or Income Statement. The items which affect the Income Statement and the ones which affect Balance Sheet are listed below :

INCOME STATEMENT :

Service Earnings, Advertising Expense, Dividends, Insurance Expense, Rent Expense, Supply Expense, Wages Expense

BALANCE SHEET :

All the remaining items will form part of Balance Sheet.

Hopefully, You can solve the question on your own now. Please find the attached screenshot of solution.