Answer:
1. Longhorn Corporation
Income Statement
For the year ended December 31, 2021
Service Revenue $71,700
<u> Cost of goods sold 54,200</u>
Gross profit $17,500
Operating expenses:
Delivery expense 3,400
<u> Salaries expense 6,300 </u>
Operating income $7,800
2. Longhorn Corporation
Stockholder's Equity
As of December 31, 2021
Capital Retained Earnings Total
1-Jan-21 $22,000 $9,400 $ 31,400
Issuance of share 2,200 2,200
<u>Net income 7,800 7,800</u>
31-Dec-21 $24,200 $17,200 $41,400
3. Longhorn Corporation
Balance Sheet
As of December 31, 2021
Asset
Current Assets
Cash $1,300
<u> Supplies 1,600 </u>
Total current assets 2,900
Non-current assets
Equipment 20,000
<u>Buildings 22,000 </u>
Total non-current assets 42,000
<u>Total assets $44,900 </u>
Liabilities and Equity
Current liability
Accounts payable $2,600
<u> Salaries payable 900 </u>
Total current liabilities $3,500
<u>Total liabilities $3,500 </u>
Equity
Capital stock $24,200
<u>Retained earnings 17,200 </u>
Total equity $41,400
<u>Total liabilities and Equity $44,900 </u>
Explanation:
1. Income Statement
In preparation of Income statement, we must closed all nominal accounts with it starts from revenue and deduct all expenses to arrive the operating income. It is important that we never forget the headings consists of Name of the company, What schedule to prepare and what period it is applicable for.
2.Statement of changes in Equity
In preparation of statement of changes equity, all transaction affecting the corporation's capital will be presented here. Begins with the capital, add additional issuance and the net income for the period that will be closed to retained earnings.
3. Balance sheet
This schedule presents the corporations real accounts. Started from assets, liabilities and the Equity. It is important that we never forget the headings consists of Name of the company, What schedule to prepare and what period it is applicable for.
