Question

follows (the amounts are rounded to thousands of dollars to simplify): 7 Account Titles Debit Credit Cash $ 4 Accounts Receivable Supplies 11 Land 0 Equipment 53 Accumulated $ 7 Depreciation Software 20 Accumulated Amortization Accounts Payable 6 Notes Payable 0 (short-term) Salaries and Wages 0 Payable Interest Payable 0 Income Tax Payable 0 Common Stock 65 Retained Earnings 7 Service Revenue 0 Salaries and Wages 0 Expense Depreciation Expense 0 Amortization Expense 0 Income Tax Expense 0 Interest Expense 0 Supplies Expense 0 Totals $ 92 $92 Transactions and events during 2018 (summarized in thousands of dollars) follow: a. Borrowed $13 cash on March 1 using a short-term note. b. Purchased land on March 2 for future building site; paid cash, $7. c. Issued additional shares of common stock on April 3 for $31. d. Purchased software on July 4, $12 cash. e. Purchased supplies on account on October 5 for future use, $17. f. Paid accounts payable on November 6, $14. g. Signed a $30 service contract on November 7 to start February 1, 2019. h. Recorded revenues of $146 on December 8, including $33 on credit and $113 collected in cash. i. Recognized salaries and wages expense on December 9, $78 paid in cash. j. Collected accounts receivable on December 10, $17. Data for adjusting journal entries as of December 31: k. Unrecorded amortization for the year on software, $7. 1. Supplies counted on December 31, 2018, $11. m. Depreciation for the year on the equipment, $7. n. Interest of $2 to accrue on notes payable. o. Salaries and wages earned but not yet paid or recorded, $13. p. Income tax for the year was $9. It will be paid in 2019.

1. 6-a. Prepare an income statement.

2. 6-b. Prepare the statement of retained earnings.

3. 6-c. Prepare the balance sheet.

Answer 1

Income Statement for the Year Ended December 31,2018 Amount $ 146 91 7 Particulars Sales Less: Expenses Salaries and Wages Expenses Amortization Supplies Expenses Depreciation Expenses Interest expenses Total Expenses Net Income Less: Income Tax Expenses Income After Tax $ $ $ $ $ 17 7 2 124 $ $ $ $ 22 9 13 $ 7 Statement of Retained Earnings Opening Balance Add: Net income Closing Balance $ 13 $ 20 Amount Balance Sheet At December 31, 2018 Particulars Assets Current Assets Cash Supplies Account Receivables Allowance for doubtful Debts -13 $ $ $ 11 100 $ 98 $ 7 53 39 $ $ $ $ 14 $ 32 14 $ 18 64 $ $ 162 9 Total Current Assets Non Current Assets Land Equipment less: Accumulated Depreciation Software Accumulated Amortization Total Non Current Assets Total assets Laibilities and Stockholders Equity Laibilities Current Labilities Account Payables Note Payable ( Short Term) Interest Payable Income Tax payable Salaries and Wages payable Total Current Labilities Non Current Laibilities Total Non Cuurent labilities Total Labilities Stock Holders Equity Common Stock Retain Earnings Total Stockholders Holders Total Labilities and Equity 13 $ $ $ $ $ 2 9. 13 $ 46 $ $ 46 96 $ $ 20 $ $ 116 162