Question

Solve the following problem

Part 3: Below are the accounts for Ben Inc. The company just completed its fourth year of operations ended December 31, 2019. Prepare the (1) Income Statement and the (2) Balance Sheet for Ben Inc. Use the provided tables and add proper headings when making these statements. 213,000 34,000 275,000 8,000 4,000 Cash Accounts Payable Service Fees Revenue Supplies Expense Insurance Expense Retained Earnings, 1/1/19 Building Rent Expense Salaries Expense Supplies Inventory Maintenance Expense Contributed Capital Notes Payable Accounts Receivable Dividends (declared and paid during 2019) 41,000 80,000 10,000 56,000 32,000 7,000 46,000 32,000 16,000 2,000

Answer 1

INCOME STATEMENT OF BEN INC.

(for the year ended 31.12.2019)

PARTICULAR	$	$
Service Fees Revenue		275,000
Cost of goods sold		0
Gross profit		275,000
Operating Expenses
supplies expenses	8,000
Salaries expenses	56,000
maintenance expenses	7,000
insurance expenses	4,000
rent expenses	10,000	85,000
Income before Income tax		190,000
Income tax		0
Net Income for the year		190,000

BALANCE SHEET OF BEN INC.

(as on 31.12.2019)

PARTICULARS	$
ASSETS
Non-current Assets
Building	80,000
Current Assets
Supplies Inventory	32,000
Accounts Receivables	16,000
Cash & cash equivalents	2,13,000
TOTAL ASSETS	3,41,000
EQUITY & LIABILITIES
EQUITY
Contributed Capital	46,000
Retained Earnings	41,000
Other components of Equity	1,90,000
Dividend appropriation	-2,000
TOTAL EQUITY	2,75,000
LIABILITIES
Current Liabilities
Accounts Payable	34,000
Notes Payables	32,000
TOTAL EQUITY & LIABILITIES	3,41,000