Question

The following data are for the Grass is Greener Company at the end of 2017, after adjustments, except for the calculation of income tax expense. 27 Accounts payable Property and equipment Cost of service expense Supplies Service revenue Bonds payable Interest receivable Retained earnings Notes payable Investments Accumulated depreciation $281,700 Prepaid insurance 672,500 Contributed capital 183,600 Other revenue 216,900 Deferred revenue 904,000 Depreciation expense 229,600 Accounts receivable 4,300 Rent expense 187,400 Cash 356,040 Accrued liabilities 146,400 Prepaid rent 128,900 Administrative and general expense (includes Interest, utilities, etc.) 336,200 income tax payable $6,800 380,600 114,100 83,600 57,750 607,550 30,500 351,340 23,400 11,200 64,300 Supplies expense Required: A) Calculate the income before income tax B) Calculate the income tax owed by the company if its tax rate is 40%. This question will be sent to your instructor for grading. 9 of 45 !!! < Prey Next > MacBook Air

Answer 1

(a) Income Statement -

Income Statement
Particulars	Amount
Service Revenue	904,000
Cost of Service expenses	(183,600)
Gross Profit	720,400
Expenses/ (Income)
Administrative and general Expenses	64,300
Supplies Expenses	336,200
Other revenue	(114,100)
Depreciation Expenses	57,750
Rent Expenses	30,500
Total Expenses	374,650
Income before Income Tax	345,750
(-) Income Tax	(138,300)
Net Income	207,450

Income before Income Tax = $ 345,750

Income Tax = $ 138,300

Net Income - $ 207,450

(b) Balance Sheet -

Balance Sheet
Liabilities	Amount	Assets	Amount
Shareholders Equity		Non Current Assets
Contributed Capital	380,600	Property and Equipment	672,500
Retained Earnings	187,400	(-) Accumulated Depreciation	(128,900)
Add: Net Income	207,450
		Investments	146,400
Non Current Liabilities
Bond Payable	229,600	Current Assets
Notes Payable	356,040	Cash	351,340
		Supplies	216,900
		Interest receivable	4,300
Current Liabilities		Prepaid Insurance	6,800
Accounts Payable	281,700	Accounts receivable	607,550
Deferred Revenue	83,600	Prepaid Rent	11,200
Accrued Liabilities	23,400
Income Tax Payable	138,300
	1,888,090		1,888,090

(c) Adjusted Trial Balance -

Adjusted Trial Balance
Particulars	Debit	Credit
Cash	351,340
Supplies	216,900
Interest receivable	4,300
Prepaid Insurance	6,800
Accounts receivable	607,550
Prepaid Rent	11,200
Property and Equipment	672,500
Accumulated Depreciation		128,900
Investments	146,400
Contributed Capital		380,600
Retained Earnings		187,400
Bond Payable		229,600
Notes Payable		356,040
Accounts Payable		281,700
Deferred Revenue		83,600
Accrued Liabilities		23,400
Income Tax Payable		138,300
Service Revenue		904,000
Cost of Service expenses	183,600
Administrative and general Expenses	64,300
Supplies Expenses	336,200
Other revenue		114,100
Depreciation Expenses	57,750
Rent Expenses	30,500
Income Tax	138,300
Total	2,827,640	2,827,640