Question

These items are taken from the financial statements of Martin Corporation for 2017.

Answer 1

Answer:

Service revenue                                    68,000

Utilities expense                             2,000

Maintenance and repairs expense 1,800

Depreciation expense                    3,600

Insurance expense                         2,200

Salaries and wages expense       37,000

Total expenses                                     (46,600)  

Net Income                                             21,400

Retained earnings (beginning) $31,000

Net Income                                  21,400              

Dividends                                   (12,000)  

Ending Retained Earnings         40,400

Balance Sheet

Assets

current

Cash                           10,100

Accounts receivable  11,700

Prepaid insurance      3,500  

total current              25,300

Non-Current

Equipment(net)         48,400

Total Assets:              73,700

Liabilities

Accounts payable                18,300

Salaries and wages payable 3,000

Total Liabilities                      21,300

Equity

Common stock           12,000

Retained Earings        40,400

Total Equity                 52,400

Total Liabilities + Equity        73,700

Explanation:

First, we do the income statmeent which is revenues less expenses accounts

Then, we do the retained earnings.

To the beginning balance we add up the net income and subtract the dividends.

Then, end with the blaance sheet:

first assets in order of liquity

then liabilities and last equity using the retained earnings balance we calcualted.