Answer and Explanation:
The Preparation of the income statement is shown below:-
Izzo Company
Income statement
For the year ended December 31, 2019
Particulars Amount
Service Fee Revenue $275,000
Total Revenue a $275,000
Expenses:
Supplies expense $8,000
Insurance expense $4,000
Rent expense $10,000
Salaries expense $56,000
Total Expense b $78,000
Net Income (a-b) $197,000
2. The preparation of the balance sheet is shown below:-
Izzo Company
Balance sheet
For the year ended December 31, 2019
Assets
Current assets:
Cash $213,000
Accounts Receivable $16,000
Supplies Inventory $32,000
Total current assets $261,000
Property, plant, and equipment:
Building $80,000
Total Long-term assets $80,000
Total Assets $341,000
Liabilities
Current liabilities:
Account Payable $34,000
Total current liabilities $34,000
Long term liabilities
Notes payable [long term] $32,000
Total long term Liabilities $32,000
Stockholders` Equity
Contributed capital $80,000
Retained Earnings * $195,000
Total stockholders` equity $275,000
Total liabilities and stockholders
equity $341,000
*Note
Beginning Balance $200,000
Add: Net Income $197,000
Less:
Cash Dividends ($202,000)
Retained Earnings Closing
Balance $195,000
