Question

As of December 31, 2017, Armani Company’s financial records show the following items and amounts. Cash $ 10,000 Accounts receivable 9,000 Supplies 6,000 Equipment 5,000 Accounts payable 23,000 A. Armani, Capital, Dec. 31, 2016 4,000 A. Armani, Capital, Dec. 31, 2017 7,000 A. Armani, Withdrawals 13,000 Consulting revenue 33,000 Rental revenue 22,000 Salaries expense 20,000 Rent expense 12,000 Selling and administrative expenses 8,000 Note: Early in 2017, the owner invested $1,000 cash in the business. Required: Prepare a year-end balance sheet for Armani Company.

Answer 1

Answer:

December 31, 2017 Balance Sheet

$10,000 Cash

$9,000 Accounts Receivable

$6,000 Supplies

$25,000  TOTAL CURRENT ASSETS  

$5,000 Equipment

$5,000  TOTAL NONCURRENT ASSETS  

$30,000  TOTAL ASSETS  

$23,000  Accounts Payable  

$23,000  TOTAL CURRENT LIABILITIES  

$23,000  TOTAL LIABILITIES  

$1,000  Retained Earnings  

$6,000  Capital  

$7,000  TOTAL EQUITY  

$30,000  TOTAL EQUITY + LIABILITIES  

Explanation:

December 31, 2017 Balance Sheet

$10,000 Cash

$9,000 Accounts Receivable

$6,000 Supplies

$25,000  TOTAL CURRENT ASSETS  

$5,000 Equipment

$5,000  TOTAL NONCURRENT ASSETS  

$30,000  TOTAL ASSETS  

$23,000  Accounts Payable  

$23,000  TOTAL CURRENT LIABILITIES  

$23,000  TOTAL LIABILITIES  

$1,000  Retained Earnings  

$6,000  Capital  

$7,000  TOTAL EQUITY  

$30,000  TOTAL EQUITY + LIABILITIES  

Income Statement  

Consulting Revenue  $33,000  

Rental Revenue        $22,000  

Salaries Expenses   -$20,000  

Rent Expenses        -$12,000  

Selling and Adm Exp -$8,000  

Income Statement  $15,000  

Retained Earnings Report  

Opening retained earnings $ 0,000

Add: Net Income $ 15,000

Subtotal $ 15,000

Less: Withdrawals -$ 13,000

Less: Investment -$ 1,000

Total $ 1,000