Question

Frozen Ice-cream Corporation (FICC) has the following items for the month of December 2020. Please use this information to answer the following questions. Utilities expense $6,000 Accounts payable $40,000 Prepaid Insurance $3,000 Revenue - Ice-cream sales $180,000 Cash $9,000 Dividends $1,000 Unearned revenue $2,000 Note payable (payable in 5 years) $60,000 Ice-cream inventory $8,500 Retained earnings (December 1, 2018) $17,000 Salaries expense $160,000 Rent expense $12,000 Accounts receivable $4,500 Common stock $500 Equipment $95,000 Income tax rate 25% Question A - FICK's Income Statement (A1): What is FICK's total revenue

Answer 1

Question Completion:

Unearned revenue is assumed to be $1,500 and not $2,000.

Answer:

Frozen Ice-cream Corporation (FICC)

Income Statement for the month of December 2020:

Revenue - Ice-cream sales                  $180,000

Salaries expense          $160,000

Rent expense                 $12,000

Utilities expense              $6,000          178,000

Income before tax                                  $2,000

Income tax (25%)                                         500

Net Income                                             $1,500

Retained earnings (December 1, 2018)    $17,000

Net income                                                  $1,500

Dividends                                                    $1,000

Retained earnings (December 31, 2018) $17,500

FICC's total revenue is $180,000.

Explanation:

a) Data and Calculations:

Trial Balance

Account Titles                      Debit     Credit

Cash                                     $9,000

Accounts receivable            $4,500

Ice-cream inventory            $8,500

Prepaid Insurance               $3,000

Equipment                        $95,000  

Accounts payable                                  $40,000

Unearned revenue                                   $1,500

Note payable (payable in 5 years)       $60,000

Common stock                                           $500

Retained earnings (December 1, 2018) $17,000

Revenue - Ice-cream sales                  $180,000

Salaries expense          $160,000

Rent expense                 $12,000

Utilities expense              $6,000

Dividends                          $1,000

Totals                          $299,000      $299,000

Income tax rate 25%