Answer:
Income Statment:
Trucking fees earned 130,000
Depreciation expense—Trucks (23,500)
Salaries expense (61,000)
Office supplies expense (8,000)
Repairs expense—Trucks <u> (12,000) </u>
Net Income 25,500
Retained Earnings
Beginning 155,000
Net Income 25,500
Dividends <u> (20,000) </u>
Ending 160,500
Balance Sheet:
Cash 8,000 Accounts payable 12,000
Accounts receivable 17,500 Interest payable 4,000
Office supplies <u> 3,000 </u> Total current liabilities 16,000
Total Current Assets: 28,500 Long-term 53,000
Trucks (net) 136,000 Total liabilities 69,000
Land <u> 85,000</u> Common Stock 20,000
Total non-current 221,000 Retained Earnings 160,500
Total Equity 180,500
Total Assets 249,500 Liabilities + Equity 249,500
Explanation:
For the income statement we list the revenue and then, we subtract all the expenses account.
Retained Earnings will be beginning + income - dividends. This value will go into the balance sheet.
For the balance sheet, we display assets into both categories:
current: who are going to be converted into cash within a year.
and non-current like the truck and the land which are going to be in the company's book for more than a year before converting into cash.
Liabilities and equity will be in the other side and their sum should match the total assets.
