Answer:
Destin Incorporated
1. Net income for the month ended April 30, 2012 is $1,000.
2. Retained earnings as of April 30, 2012 is $6,000.
3. Total assets as of April 30, 2012 is $41,000.
4. Total liabilities as of April 30, 2012 is $10,000.
5. The total owners' equity as of April 30, 2012 is $31,000.
6. The balance of Accumulated depreciation as of April 30, 2012 is $4,000.
Explanation:
a) Data and Calculations:
Balance sheet:
Assets
Cash 3,000 + 16,000 -2,000 - 1,000 - 10,000 = 6,000
Inventory 14,000 + 10,000 - 9,000 = 15,000
Prepaid Insurance 3,000 - 2,000 = 1,000
Equipment (net) 20,000 - 1,000
Total Assets 40,000
Liabilities & Owners' Equity
Loan Payable 10,000
Common Stock 25,000
Retained Earnings 5,000
Total Liabilities and OE 40,000
Revenue $16,000
Cost of goods sold 9,000
Gross profit $7,000
Wages 2,000
Other expenses 1,000
Depreciation expense 1,000
Insurance expense 2,000
Total expenses $6,000
Net income $1,000
Retained earnings:
Beginning balance 5,000
Net income 1,000
Ending balance 6,000
Total assets:
Cash balance 6,000
Inventory 15,000
Prepaid insur. 1,000
Equipment 19,000
Total assets = 41,000
Total liabilities:
Loan Payable 10,000
Equity:
Common Stock 25,000
Retained earnings 6,000
Owners' equity 31,000
For the year, the balance of Accumulated Depreciation = $4,000 ($1,000 * 4)
