Question

Finders Investigative Services is an investigative services firm that is owned and operated by Stacy Tanner. On June 30, 2019, the end of the fiscal year, the accountant for Finders Investigative Services prepared an end-of-period spreadsheet, a part of which follows:

Finders Investigative Services
End-of-Period Spreadsheet
For the Year Ended June 30, 2019
	~	Adjusted Trial Balance
Account Title	~	Dr.	Cr.
	~
Cash	~	24,600
Accounts Receivable	~	71,400
Supplies	~	4,700
Prepaid Insurance	~	2,500
Building	~	432,500
Accumulated Depreciation-Building	~		42,700
Accounts Payable	~		11,700
Salaries Payable	~		2,500
Unearned Rent	~		1,800
Stacy Tanner, Capital	~		373,400
Stacy Tanner, Drawing	~	12,000
Service Fees	~		713,600
Rent Revenue	~		12,000
Salaries Expense	~	526,000
Rent Expense	~	48,000
Supplies Expense	~	11,000
Depreciation Expense-Building	~	7,100
Utilities Expense	~	7,300
Repairs Expense	~	2,800
Insurance Expense	~	2,000
Miscellaneous Expense	~	5,800
	~	1,157,700	1,157,700

	Required:
1.	Prepare an income statement, a statement of owner’s equity (no additional investments were made during the year), and a balance sheet.*
2.	Journalize the entries that were required to close the accounts at June 30.*
3.	If Stacy Tanner, Capital has instead decreased $30,000 after the closing entries were posted, and the withdrawals remained the same, what would have been the amount of net income or net loss? *Be sure to read the instructions for each financial statement carefully. Refer to the chart of accounts and the list of Labels and Amount Descriptions provided for the exact wording of the answer choices for text entries.

Answer 1

question no 1
	Finder Investigative Service
	Income Statement
	for the year ended June 30,2019
	Descriptions	$
	Revenue :
	Service Revenue		713600
	Rent Revenue	12000
	Total Revenue	725600
	Expenses:
	Salaries	526000
	Rent expenses	48000
	Suppliers expenses	11000
	Depreciation on Building	7100
	Utilities expenses	7300
	Repairs expenses	2800
	Insurence expense	2000
	Miscellaneous expenses	5800
	Total Expenses	610000
	Net Profit	115600
	Statement of Owner's Equity		$
	Opening balance of Stacy tanner Capital	373400
	Add:Net profit for the year 2019	115600
	Less:Drawings	-12000
	Total Owner's equity*	477000
	Balance Sheet
	as at June 30, 2019
		$
	Assets :
	Cash in hand	24600
	Prepaid Insurance	2500
	Accounts Receivables	71400
	Supplies	4700
	Building (Cost less depreciation )#	389800
	Total	493000
	Liabilities and Owner's Equity :
	Unearned Revenue	1800
	Salary payable	2500
	Accounts Payable	11700
	Owner's Equity*	477000
	Total	493000
	# written down value of Buliding		$
	Cost	432500
	Less:Accumulated depreciation	-42700
	Wrritten down value #	389800
question no 2	Journal	Debit ($)	Credit($)
	Service Revenue A/c		713600
	Rent Revenue A/c		12000
	To Profit & Loss A/c			725600
	(all revenue transferred to proft & loss account )
	Profit & Loss A/c		610000
	To Salaries		526000
	To Rent expenses		48000
	To Suppliers expenses		11000
	To Depreciation on Building			7100
	To utilities		7300
	To Repairs		2800
	To Insurance expenses			2000
	To Miscellaneous expenses			5800
	(all expenses are transferred to profit & loss accounts)
	Profit & Loss A/c		115600
	To Stacy Tanner Capital A/c			115600
	(profit are transferred to owner' capital account)
question no 3	If Stacy Tanner,Capital hs instead decreased $30000 after the closing entries were posted and withdrawal remain the same then the net Income will be the same (i.e$115600) since the impact of such reduction can not effect after closing of books of accounts. If it happend before the closing date then the net profit will decreased and that the net proft would be $85600.The effect of this event will be reflected on the next year financial statements.