Question

Use the following information available as of December 31 to prepare an income statement for the year and a balance sheet for Goldie Company.
Fees for services performed during the year, $123,000
Accounts payable, $17,800
Accounts receivable, $17,400
Miscellaneous expenses for the year, $9,000
Supplies on hand, $3,300
Notes payable, $25,000
Interest expense on the note for the year, $3,700
Equipment, $92,700
Cash on hand, $11,600
Salaries expense for the year, $71,500
Supplies expense for the year, $8,500
Rent expense for the year, $11,100
Common stock that has been issued, $55,000
Retained earnings at the end of the year, $27,200

Answer 1

Answer:

Goldie Company

a) Income Statement for the year ended December 31:

Fees for services                             $123,000

Miscellaneous expenses  9,000

Interest expense               3,700

Salaries expense             71,500

Supplies expense             8,500

Rent expense                    11,100   $103,800

Net income                                        19,200

b) Balance Sheet as of December 31:

Assets:

Cash on hand                       $11,600

Accounts receivable              17,400

Supplies on hand                   3,300

Equipment                           92,700

Total assets                     $125,000

Liabilities and Equity:

Accounts payable              $17,800

Notes payable                    25,000

Common stock                  55,000

Retained earnings             27,200

Total liabilities & equity $125,000                    

Explanation:

a) Data and Calculations:

Trial balance as of December 31:

Account Titles                        Debit        Credit

Cash on hand                     $11,600

Accounts receivable            17,400

Supplies on hand                 3,300

Equipment                         92,700

Accounts payable                                $17,800

Notes payable                                      25,000

Common stock                                    55,000

Retained earnings                                 8,000

Fees for services                               123,000

Miscellaneous expenses  9,000

Interest expense               3,700

Salaries expense             71,500

Supplies expense            8,500

Rent expense                   11,100

Totals                        $228,800    $228,800

Retained Earnings at January 1 =       $8,000 (27,200 - 19,200)

Net income                                           19,200

Retained Earnings at December 31 $27,200