Question

These financial statement items are for Kingbird, Inc. at year-end, July 31, 2017. Salaries and wages payable $ 3,780 Salaries and wages expense 59,200 Supplies expense 16,900 Equipment 20,200 Accounts payable 4,100 Service revenue 67,800 Rent revenue 9,800 Notes payable (due in 2020) 3,000 Common stock 16,000 Cash 30,900 Accounts receivable 10,980 Accumulated depreciation—equipment 7,400 Dividends 4,000 Depreciation expense 5,400 Retained earnings (beginning of the year) 35,700 Prepare an income statement for the year. Kingbird, Inc. did not issue any new stock during the year. Kingbird, Inc. Income Statement $ $ $ $ SHOW LIST OF ACCOUNTS LINK TO TEXT LINK TO TEXT Prepare a retained earnings statement for the year. Kingbird, Inc. did not issue any new stock during the year. Kingbird, Inc. Retained Earnings Statement $ : $ : $ SHOW LIST OF ACCOUNTS LINK TO TEXT LINK TO TEXT Prepare a classified balance sheet at July 31. (List current assets in order of liquidity.) Kingbird, Inc. Balance Sheet Assets $ $ : $ Liabilities and Stockholders' Equity $ $ $ SHOW LIST OF ACCOUNTS LINK TO TEXT LINK TO TEXT Compute the current ratio and debt to assets ratio. (Round answers to 1 decimal place, e.g. 15.2.) Current ratio :1 Debt to assets ratio % Click if you would like to Show Work for this question: Open Show Work

Answer 1

Answer:

Kingbird, Inc.

Income Statement

For the year ended July 31, 2017

Revenues:

• Service revenue $67,800
• Rent revenue $9,800                                  $77,600

Expenses:

• Salaries and wages expense $59,200
• Supplies expense $16,900
• Depreciation expense $5,400                   ($81,500)

Net loss                                                                  ($3,900)

Kingbird, Inc.

Balance Sheet

For the year ended July 31, 2017

Assets

Current assets

• Cash $30,900
• Accounts receivable $10,980                   $41,880

Non-current assets

• Equipment (net) $12,800                           $12,800

Total assets:                                                                     $54,680

Liabilities

Current liabilities

• Salaries and wages payable $3,780
• Accounts payable $4,100                           $7,880

Long term liabilities

• Notes payable (due in 2020) $3,000       $3,000

Stockholders' equity

• Common stock $16,000
• Retained earnings $27,800                     $43,800

Total liabilities and shareholders' equity                       $54,680            

Kingbird, Inc.

Retained Earnings Statement

For the year ended July 31, 2017

Retained earnings August 1, 2016                  $35,700

Net loss                                                             ($3,900)

                                                                          $31,800

Dividends                                                          ($4,000)

Retained earnings July 31, 2017                      $27,800

current ratio = current assets / current liabilities = $41,880 / $7,880 = 5.3

debt to assets ratio = total liabilities / total assets = $10,880 / $54,680 = 19.9%