Question

1 Critical Thinking Problem 2.1 (Algo) Financial Statements LO 2-3, 2-4 3 Onts The following account balances are for Ping Chung, Certified Public Accountant, as of April 30, 20X1. Cash Accounts receivable Maintenance expense Advertising expense Fees earned Ping Chung, Capital, April 1 Salaries expense Machinery Accounts payable Ping Chung, withdrawals for April $120,000 48,000 21,400 17,060 125,200 eBook ASK 59,500 91,500 52,800 31,700 Prim Required: Determine the balance for Ping Chung, Capital, April 1, 20X1. Prepare an income statement and a statement of owner's equity for the month ended April 30, 20X1, and a balance sheet for April 30, 20X1. References Complete this question by entering your answers in the tabs below. Ping Chu thg Capital Income Statement Stmt of Owners Eoty Balance Sheet Analyze Determine the balance for Ping Chung, Capital, April 1, 20X1. Ping Chung, Capital, April 1, 20X1 5 88,300 Income Statement >

Answer 1

a) The income statement for the year ended April 30,20x1 is as follows:

	$	$
Fees Earned		125,200
Less: Operating Expenses
Salaries Expenses	59,500
Maintenance Expenses	21,400
Advertising expenses	17,060
Total Operating Expenses		97,960
Net Income		$ 27,240

b) The balance sheet as on April 30,20x1 is as follows:

Assets	$	$
Current assets:
Cash	120,000
Account Receivable	48,000
Total current assets		168,000
Non Current Assets:
Machinery		91,500
Total Assets		$259,500
Liability and Owner's equity
Current Liability:
Account payable		52,800
Owner's equity:
Ping Chung Capital April 30,20x1	(Balance)	206,700
($259,500 - $52,800)
Total Liability and Owner's equity		$259,500

c) Owner's equity for the month ended April 30,20x1 is calculated as follows:

	$
Ping Chung Capital April 1,20x1 (A)   (Balance)	$ 211,160
(A = D - C + B)
Less: Ping Chung Withdrawals for April (B)	31,700
Add: Net Income (C)	27,240
Ping Chung Capital April 30,20x1 (D)	$206,700