Question

FULL SCREEN PRINTER VERSION BACK Problem 1-9A Crane's Home Renovations was started in 2008 by Jim Crane. Jim operates the business from an office in his home. Listed below, in alphabetical order, are the company's assets and liabilities as at December 31, 2017, and the revenues, expenses, and drawings for the year ended December 31, 2017: Accounts payable 57,690 Operating expenses $3,954 Accounts receivable 9,849 Prepaid insurance 1,734 Cash 9,041 Salaries expense 89.409 Equipment 28,955 Service revenue 158,555 Insurance expense 3,625 Supplies 753 Interest expense 1.119 Supplies expense 19,613 J. Crane, drawings 44.720 Unearned revenue 14.770 Notes payable 29,935 Vehicles 41.060 Jim's capital at the beginning of 2017 was $42,882. He made no investments during the year.

1.prepare income statement
2.Prepare owner's equity statement
3. Prepare balance sheet

Answer 1

1.

Income Statement
Revenues
Service revenue		158,555
Expenses:
Insurance expense	3,625
Interest expense	1,119
Operating expenses	3,954
Salaries expense	89,409
Supplies expense	19,613
Total expenses		-117,720
Net income		$40,835

2.

Statement of Owners Equity
J. Crane, capital beginning		42,882
Add: Net income	40,835
Less: J. Crane drawings	-44,720
		-3,885
J. Crane, capital ending		$38,997

3.

Balance Sheet
Assets		Amount
Current Assets:
Cash	9,041
Accounts receivable	9,849
Supplies	753
Prepaid insurance	1,734
Total Current Assets		21,377
Plant,Assets :
Equipment	28,955
Vehicles	41,060
Total plant asset		70,015
Total Assets		$91,392
Liabilities and Owners Equity
Current Liabilities:
Accounts payable	7,690
Unearned revenue	14,770
Total Current liabilities		22,460
Long term Liabilities:
Notes payable	29,935
Total Long term Liabilities		29,935
Owners Equity:
J. Crane, capital ending	38,997
Total Owners Equity		38,997
Total Liabilities & Owners Equity		$91,392

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