Answer:
A. $32,000
B. $42,000
C. $54,000
Explanation:
A.Preparation of an income statement
J. Trendsetter Income StatementFor the Year Ended December 31
Fees earned$78,000
Less Operating expenses:
Wages expense$25,000
Rent expense10,000
Utilities expense8,000
Supplies expense1,700
Income taxes expense1,300
Total expenses 46,000
Net income$32,000
($78,000-46,000)
Therefore Income StatementFor the Year Ended December 31 will be $32,000
B. Preparation of statement of owner's equity
J. Trendsetter Statement of owners equity
As at December 31
J. Trendsetter, Capital 1/1 $10,000
Add Net income $32,000
Capital 12/31 $42,000
Therefore Statement of owners equity
As at December 31 will be $42,000
C.Preparation of balance sheet as of December 31.
J. Trendsetter Balance Sheet
As at December 31
ASSETS
Computer Equipment 21,000
Accounts Receivable 14,000
Supplies 1,000
Cash 18,000
Total Assets $54,000
Liabilities and Owner's Equity
CURRENT LIABILITIES
Accounts Payable $12,000
Owner's Equity $42,000
Total liabilities and owner's equity $54,000
Therefore balance sheet as of December 31 for both Total Assets and Total Liabilities will be $54,000
