Question

Tiffany's provides financial services related to investment selections, retirement planning, and general insurance needs. For the current year, the company reports the following amounts:
  

Advertising Expense	$	31,200		Service revenue	$	129,300
Buildings		108,000		Interest Expense		3,500
Salaries Expense		67,800		Utilities Expense		14,500
Accounts Payable		6,300		Equipment		25,700
Cash		6,400		Notes payable		30,000

  
In addition, the company had common stock of $60,000 at the beginning of the year and issued an additional $15,000 during the year. The company also had retained earnings of $20,000 at the beginning of the year and paid dividends of $3,500.
  
Required:
1. Prepare the income statement Tiffany's for the year ended December 31.

TIFFANY'S Income Statement For the year ended December 31 Expenses: Total expenses 0 $ 0

2. Prepare the statement of stockholders’ equity Tiffany's for the year ended December 31.

3. Prepare the balance sheet Tiffany's for the year ended December 31. (Be sure to list the assets and liabilities in order of their liquidity.)

Answer 1

Answer 1.

Tiffany's

Income Statement

For the year ended December 31

Revenues:
Service revenue		$129,300
Expenses:
Advertising Expense	31,200
Salaries Expense	67,800
Interest Expense	3,500
Utilities Expense	14,500
Total expenses		117,000
Net Income		$12,300

Answer 2.

Tiffany's

Statement of Stockholders' Equity

For the year ended December 31

	Common Stock	Retained Earnings	Total stockholder's Equity
Balance beginning of the year	$60,000	$20,000	$80,000
Issuance of common stock	15,000		15,000
Net income for the year		12,300	12,300
Dividends paid		(3,500)	(3,500)
Balance at the end of the year	$75,000	$28,800	$103,800

Answer 3.

Tiffany's

Balance Sheet

December 31

Assets		Liabilities
Cash	$6,400	Accounts Payable	$6,300
Buildings	108,000	Notes payable	30,000
Equipment	25,700
		Total Liabilities	36,300
		Stockholder's Equity
		Common Stock	75,000
		Retained Earnings	28,800
		Total stockholder's equity	103,800
Total assets	$140,100		$140,100