Answer:
Net Income = $2,980
Statement of owner's equity = $15,280
Total Assets = $19,050
Total Liabilities = $3,770
Explanation:
Requirement A) Income Statement
Nadia Company
Income Statement
For the Year Ended December 31, 20X9
Revenues: $ $
Fees Earned 10,930
Expenses:
Wages expense 2,450
Rent expense 1,900
Utilities expense 1,475
Depreciation Expense 1,150
Miscellaneous Expense <u> 975</u>
Total Expenses <u> </u><u>(7,950)</u>
Net Income <u> 2,980</u>
Nadia company's total revenue exceeds the total expenses, therefore, the company earns a net income of $2,980.
Requirement B) Statement of owner's equity
Nadia Company
Statement of Owner's Equity
For the Year Ended December 31, 20X9
Particulars $
Beginning Capital 10,000
Add: Additional investment (Capital) 3,000
Add: Net income for the year <u>2,980</u>
15,980
Less: Drawings <u> 700</u>
Capital, December 31 (Ending Capital) <u> 15,280</u>
The amount of $15,280 is the total owner's equity for the company. The company will this amount in the balance sheet as well.
Requirement C) Balance Sheet
Nadia Company
Balance Sheet
As At December 31, 20X9
Particulars $ $
Assets
<u>Current Assets</u>
Cash 5,130
Accounts Receivable 3,300
Prepaid Expenses 420
Total Current Assets 8,850
<u>Property, Plant, and Equipment</u>
Equipment 12,400
Less: Accumulated Depreciation (2,200)
Total Property, Plant, and Equipment <u> </u><u>10,200</u>
Total Assets 19,050
Liabilities & Owner's Equity
Liabilities
Current Liabilities
Accounts Payable 700
Notes Payable (Short-term) <u> 3,070</u>
Total Liabilities 3,770
Owner's Equity
Owner's Equity (From requirement B) <u> 15,280</u>
Total liabilities and owner's equity 19,050
Therefore, <em>Total Assets = Total Liabilities + Owner's Equity</em>
