Question

Longhorn Corporation provides low-cost food delivery services to senior citizens. At the end of the year, the company reports the following amounts:
Cash $1,200 Service revenue $67,700 Equipment 29,000 Cost of goods sold (food expense) 53,400 Accounts payable 4,400 Buildings 40,000 Delivery expense 2,600 Supplies 3,400 Salaries expense 5,500 Salaries payable 800


In addition, the company had common stock of $40,000 at the beginning of the year and issued an additional $4,000 during the year. The company also had retained earnings of $18,200 at the beginning of the year.

Required: Prepare the income statement, statement of stockholders' equity, and balance sheet for Longhorn Corporation.

Answer 1

Answer:

The income statement, statement of stockholders' equity, and balance sheet for Longhorn Corporation is given below.

The income statement

Sales Revenue                   $ 67,700

COGS                                 ($ 53,400)

Delivery expenses              ($ 2,600)

Salary expenses                 ($ 5,500)

Net profit                             $ 6,200

Balance Sheet

Asset

Cash                                  $ 1,200

Equipment                        $ 29,000

Building                             $ 40,000

Supplies                             $ 3,400

Total Assets                      $ 73,600

Equity

Common Stock                $ 44,000

Retain earning                  $ 24,400

(18,200 + 6,200)

Liability

Account Payable              $ 4,400

Salaries payable                $ 8,00

Total Liabilities                 $ 73,600

Statement of Stockholders

Opening common Stock           $ 40,000

Addition                                       $  4,000

Closing common Stock              $  44,000

Retain earning Opening            $ 18,200

Net profit                                     $ 6,200

Retain profit Closing                   $ 24,400

Total Equity                                 $ 68,400