Answer:
Hopkins CPAs and Sports Clothing
Hopkins CPAs:
Income Statement
Service Revenue $50,000
Salaries expense 32,000
Net Income $18,000
Balance Sheet
Cash $108,000
Total assets $108,000
Bank Loan $90,000
Net Income 18,000
Total liabilities +
equity $108,000
Statement of Cash Flow
Cash from operations:
Net income $18,000
Change in working
capital $90,000
Net operating cash $108,000
Reconciliation with cash:
Cash balance $108,000
Sports Clothing:
Income Statement
Sales Revenue $50,000
Cost of goods sold 26,000
Operating expense 8,000 34,000
Net income $16,000
Balance Sheet
Cash $82,000
Inventory 24,000
Total assets $106,000
Bank Loan $90,000
Net Income 16,000
Total liabilities +
equity $106,000
Statement of Cash Flow
Cash from operations:
Net income $16,000
Change in working
capital:
Bank $90,000
Inventory (24,000)
Net operating cash $82,000
Reconciliation with cash:
Cash balance $82,000
Explanation:
a) Data and Calculations:
Hopkins CPAs
Cash account:
Bank loan $90,000
Service revenue 50,000
Salaries expense (32,000)
Balance = $108,000
Trial balance
Cash $108,000
Bank Loan $90,000
Service Revenue 50,000
Salaries expense 32,000
Totals $140,000 $140,000
Sports Clothing:
Cash account:
Bank loan $90,000
Inventory (50,000)
Sales revenue 50,000
Operating expense (8,000)
Balance = $82,000
Trial balance
Cash $82,000
Bank Loan $90,000
Inventory 24,000
Cost of goods sold 26,000
Sales Revenue 50,000
Operating expense 8,000
Totals $140,000 $140,000
