Question

PE 1-4B Income statement OBJ. 5 The revenues and expenses of Sentinel Travel Service for the year ended August 31, 2019, follow: Fees earned $750,000 Office expense 295,000 Miscellaneous expense 12,000 Wages expense 450,000 Prepare an income statement for the year ended August 31, 2019.

Answer 1

PE 1-4B: Sentinel Travel Service Income Statement For the Year Ended August 31, 2019 Revenues: Fees Earned Expenses: Wages Expense $450,000 Office Expense $295,000 Miscellaneous Expense $12,000 Total Expenses Net Loss NOTE: It is considered as net loss for the period because total expenses recorded is more than revenues earned during the year. $750,000 $757,000 -$7,000 ($750000 - $757000] PE 1-5B: Sentinel Travel Service Statement of Owners' Equity For the Year Ended August 31, 2019 Barb Schroeder, Capital - Beginning Balance $380,000 Add: Additional capital invested $36,000 Less: Net Loss $7,000 [Ref: PE 1-4B] Less: Barb Schroeder, Drawings $18,000 Net decrease in owner's capital $25,000 Barb Schroeder, Capital - Ending Balance $355,000