Question

The amounts of the assets and liabilities of Nordic Travel Agency at December 31, 2019, the end of the year, and its revenue and expenses for the year follow. The capital of Ian Eisele, owner, was $670,000 on January 1, 2019, the beginning of the year. During the year, Ian withdrew $42,000. Accounts Amounts Accounts payable $ 69,500 Accounts receivable 285,000 Cash 190,500 Fees earned 912,500 Land 544,000 Miscellaneous expense 6,400 Rent expense 36,000 Supplies 5,500 Supplies expense 4,100 Utilities expense 28,500 Wages expense 510,000 Required: 1. Prepare an income statement for the year ended December 31, 2019.* 2. Prepare a statement of owner’s equity for the year ended December 31, 2019.* 3. Prepare a balance sheet as of December 31, 2019.* 4. What item appears on both the statement of owner’s equity and the balance sheet? * Refer to the information given and the lists of Accounts, Labels, and Amount Descriptions provided for the exact wording of the answer choices for text entries. Be sure to complete the statement heading. If a net loss is incurred or there is a decrease in owner’s equity, enter that amount as a negative number using a minus sign.

Answer 1

Trial Balance Income Statement $ 670,000 for the year ended December 31, 2019 lan Eisele, Capital lan Eisele, Withdrawls 42,000 Accounts payable Accounts receivable Cash Fees earned Land Miscellaneous expense6,400 Rent expense Supplies Supplies expense Utilities expense Wages expense Totals Revenues Fees earned Total Revenues Expenses Miscellaneous expense6,400 Rent expense Supplies expense Utilities expense Wages expense Total Expenses Net Income $ 69,500 912,500 $ 285,000 $ 190,500 912,500 $ 912,500 $ 544,000 36,000 $ 4,100 $ 28,500 510,000 $ 36,000 $ 5,500 $ 4,100 $ 28,500 S 510,000 $ 1,652,000 $1,652,000 585,000 327,500

Statement of Owner's Equity for the year ended December 31, 2019 2 670,000 lan Eisele, Capital, January 1, 2019 Net Income Less: Withdrawls Net Increase in Owners's Equity lan Eisele, Capital, December 31, 2019 $ 327,500 $ 42,000 $ 285,500 $955,500

Balance Sheet as of December 31, 2019 Assets Cash Accounts receivable Supplies Land Total Assets Liabilities & Owner's Equity Liabilities Accounts payable Owner's Equity lan Eisele, Capital Total Liabilities & Owner's Equity $ 190,500 $ 285,000 $ 5,500 $ 544,000 $ 1,025,000 69,500 $ 955,500 $ 1,025,000

Balance of lan Eisele, Capital as on December 31, 2019 of $955,500 appears on both Statement of Owner's Equity and Balance Sheet 4

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