Question

Presented below is selected information related to Dubai Company at December 31, 2020. The reports of financial information shows monthly the following (amounts in thousands). Accounts Payable HK$ 3,000 Salaries and Wages Expense HK$16,500 Cash 6,500 Notes Payable 25,000 Advertising Expense 6,000 Rent Expense 10,500 Service Revenue 53,500 Accounts Receivable 13,500 Equipment 29,000 Owner's Drawings 7,500 a. Determine the total assets of at December 31, 2020. b. Determine the net income that reported for December 2020. c. Determine the owner's equity of Dubai Company at December 31, 2020,

Answer 1

a) Total assets December 31, 2020 49,000 b) Net Income reported for Dec 2020 20,500 c) Owner's Equity December 31, 2020 21,000 Working notes: Currency is HK$ Trial Balance as on December 31, 2020 Account payable 3,000 Cash 6,500 Advertising expense 6,000 Service revenue 53,500 Equipment 29,000 Sales and wages expense 16,500 Notes payable 25,000 Rent expense 10,500 Accounts receivable 13,500 Owners drawing 7,500 Owners Capital 8,000 Balancing number Total 89,500 89,500 Currency is HK$ Income Statement For the Year ended December 31st, 2020 Service Revenue 53,500 Less: Operating expenses Salaries and wages expense 16,500 Rent expense 10,500 Advertising expense 6,000 Total Operating expense 33,000 Net Income 20,500 Currency is HK$ Balance Sheet As on December 31, 2020 Assets Cash 6,500 13,500 29,000 49,000 Accounts receivable Equipment Total Assets Liabilities and Owners' equity Liabilities Accounts payable Note payable 3,000 25,000 28,000 Owners' Equity Opening balance Net profit 8,000 20,500 28,500 7,500 Less: Drawings Total Liabilities and Owners' Equity 21,000 49,000