Question

The following information is available for two different types of businesses for the Year 1 accounting year. Hopkins CPAs is a service business that provides accounting services to small businesses. Sports Clothing is a merchandising business that sells sports clothing to college stidents Data for Hopkins CPAS 1. Borrowed $96 300 from the bank to start the business 2. Provided $64,200 of services to clients and collected $53,500 cash 3. Pald salary expense of $34,240 Data for Sports Clothing 1. Borrowed $96,300 from the bank to start the business 2. Purchased $64,200 inventory for cash 3. Inventory costing $27820 was sold for $52.500 cash 4. Paid 58,560 cash for operating expenses Required a. Prepare an income statement balance shent, and statement of cash flows for each of the companies Complete this question by entering your answers in the tabs below. Scorts in Stot Sports Bar Sheet Sh Flow Smit Do not owner

Answer 1

1.)	Hopkin's CPAs
	Income Statement
	For the year ended December 31, Year 1	Amount $
	Revenue
	Service Revenue	64,200
	Total Revenue	64,200
	Expenses
	Salary Expense	34,240
	Total Expenses	34,240
	Net Income	29,960
2.)	Hopkin's CPAs
	Balance Sheet
	As of December 31, Year1		Amount $
	Assets
	Cash ( 96,300 + 53,500 - 34,240 )	115,560
	Accounts Receivable ( 64,200 - 53,500 )	10,700
	Total Assets		126,260
	Liabilities
	Note Payable	96,300
	Total Liabilities		96,300
	Stockholder' s Equity
	Retained earnings	29,960
	Total Stockholder' s Equity		29,960
	Total Liabilities & Stockholder' s Equity		126,260
3.)	Hopkin's CPAs
	Statement of cash flows
	For the year ended December 31, Year 1		Amount $
	Cash Flow from operating activities
	Net Income	29,960
	Increase in accounts Receivable	-10,700
	Net Cash flow from operating activities		19,260
	Cash Flow from Investing activities		-
	Cash Flow from Financing activities
	Proceeds from bank borrowing	96,300
	Net cash flow from financing activities		96,300
	Net Increase in cash		115,560
	Opening cash balance		-
	Ending Cash Balance		115,560
4.)	Sports Clothing
	Income Statement
	For the year ended December 31, Year 1	Amount $
	Revenue
	Sales Revenue	53,500
	Total Revenue	53,500
	Expenses
	Cost of goods sold	27,820
	Operating Expenses	8,560
	Total Expenses	36,380
	Net Income	17,120
5.)	Sports Clothing
	Balance Sheet
	As of December 31, Year1		Amount $
	Assets
	Cash ( 96,300 - 64,200 + 53,500 - 8,560 )	77,040
	Inventory ( 64,200 - 27,820 )	36,380
	Total Assets		113,420
	Liabilities
	Note Payable	96,300
	Total Liabilities		96,300
	Stockholder' s Equity
	Retained earnings	17,120
	Total Stockholder' s Equity		17,120
	Total Liabilities & Stockholder' s Equity		113,420
6.)	Sports Clothing
	Statement of cash flows
	For the year ended December 31, Year 1		Amount $
	Cash Flow from operating activities
	Net Income	17,120
	Increase in Inventory	-36,380
	Net Cash flow from operating activities		-19,260
	Cash Flow from Investing activities		-
	Cash Flow from Financing activities
	Proceeds from bank borrowing	96,300
	Net cash flow from financing activities		96,300
	Net Increase in cash		77,040
	Opening cash balance		-
	Ending Cash Balance		77,040