Question

The following Information is available for two different types of businesses for the 2018 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 students. Data for Hopkins CPAS 1. Borrowed $42,000 from the bank to start the business. 2. Provided $32,000 of services to clients and collected $32,000 cash 3. Pald salary expense of $20,500. Data for Sports Clothing 1. Borrowed $42.000 from the bank to start the business 2. Purchased $21,000 Inventory for cash. 3. Inventory costing $17,600 was sold for $32,000 cash. 4. Pald $2,600 cash for operating expenses. Required a. Prepare an income statement, balance sheet, and statement of cash flows for each of the companies. Complete this question by entering your answers in the tabs below. Show less Hopkins Inc Strnt Hopkins Bal Hopkins Stm Sheet CF Sports Inc Stmt Sports Bal Sheet Sports Stmt Prepare a balance sheet for Hopkins CPAS, HOPKINS CPAS Balance Sheet As of December 31, 2018 Assets Cash Liabilities Notes payable

Answer 1

Hopkins CPAs
Income statement
For the year ended December 31,2018
		$
Service revenue		32000
Less:Salary expense		20500
Net income		11500
Hopkins CPAs
Balance sheet
As of December 31,2018
				$	$
Assets
Cash	(42000+32000-20500)			53500
Total assets					53500
Liabilities
Notes payable				42000
Total liabilities					42000
Stockholder's equity
Retained earnings					11500
Total stockholder's equity
Total liabilities and stockholder's equity					53500
Hopkins CPAs
Statement of cash flows
For the year ended December 31,2018
				$	$
Cash flow from operating activities:
Cash received from customers				32000
Salary expense paid				-20500
Net cash from operating activities:					11500
Cash flow from financing activities:
Borrowed from bank					42000
Net increase in cash					53500
Add:Beginning balance of cash					0
Ending balance of cash					53500
Sports Inc.
Income statement
For the year ended December 31,2018
			$
Sales			32000
Less:Cost of goods sold			17600
Gross profit			14400
Less:Operating expenses			2600
Net income			11800

Sports Inc.
Balance sheet
As of December 31,2018
				$	$
Assets
Cash	(42000-21000+32000-2600)			50400
Inventory	(21000-17600)			3400
Total assets					53800

42000 42000 Liabilities Notes payable Total liabilities Stockholder's equity Retained earnings Total stockholder's equity Total liabilities and stockholder's equity 118001 53800 Sports Inc. Statement of cash flows For the year ended December 31, 2018 $ $ 320001 -21000 -2600 8400 Cash flow from operating activities: Cash received from customers Cash paid to suppliers Operating expenses paid Net cash from operating activities: Cash flow from financing activities: Borrowed from bank Net increase in cash Add:Beginning balance of cash Ending balance of cash 42000 50400 0 50400