Question

Financial data for Safety Hire as of 30 June 2019 are: Accounts receivable $ 63 000 Wages expense Equipment hire income 170 000 Advertising expense Accounts payable 40 000 Land Michael Donato, capital ? Hire equipment Cash at bank 45000 Loan payable Mortgage payable 130 000 Electricity expense Building 85000 Telephone expense $ 75 000 30 000 75 000 180 000 50 000 18000 7500 Required: Prepare an income statement for the month of June and a balance sheet in account format for Safety Hire as at 30 June 2019. (10 marks)

Answer 1

Income Statement
Revenues
Equipment hire income		$       170,000
Expenses
Wages Expense	$          75,000
Advertising Expense	$          30,000
Electricity Expense	$          18,000
Telephone Expense	$            7,500
Total Expenses		$       130,500
Net Income		$          39,500

Balance Sheet
Assets	Liabilities & Owner's Equity
Current Assets			Current Liabilities
Cash at bank	$          45,000		Accounts Payable	$       40,000
Accounts Receivable	$          63,000		Total Current Liabilities		$        40,000
Total Current Assets		$       108,000	Non-Current Liabilities
Property, Plant and Equipment			Mortgage Payable	$    130,000
Land	$          75,000		Loan Payable	$       50,000
Building	$          85,000		Total Non-Current Liabilities		$      180,000
Hire Equipment	$       180,000		Total Liabilities		$      220,000
Total Property, Plant and Equipment		$       340,000	Onwer's Equity
			Michael Donato, Capital	$    228,000
			Total Owner's Equity		$      228,000
Total Assets		$       448,000	Total Liabilities & Owner's Equity		$      448,000