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Chapter 3: Q11E (page 133)

The adjusted trial balance of Anderson Cooper Co. as of December 31, 2017, contains the following.

ANDERSON COOPER CO.

ADJUSTED TRIAL BALANCE

DECEMBER 31, 2017

Dr.

Cr

Cash

\(19,472

Accounts Receivable

6,920

Prepaid Rent

2,280

Equipment

18,050

Accumulated Depreciation鈥擡quipment

\) 4,895

Notes Payable

5,700

Accounts Payable

5,472

Common Stock

20,000

Retained Earnings

11,310

Dividend

3,000

Service Revenue

11,590

Salaries and Wages Expense

6,840

Rent Expense

2,260

Depreciation Expense

145

Interest Expense

83

Interest Payable

83

\(59,050

\)59,050

Instructions

(a) Prepare an income statement.

(b) Prepare a statement of retained earnings.

(c) Prepare a classified balance sheet.

Short Answer

Expert verified

a) Net Income is $2,262.

b) Retained earnings on December 31 are$10,572.

c) Balance sheet total is $41,827.

Step by step solution

01

Meaning of Income Statement

The income statement, sometimes referred to as a profit and loss statement, is a document created by a company's management that lists the company's earnings, costs, and net gain or loss for a given period.

02

(a) Preparing an Income Statement

ANDERSON COOPER CO.

Income Statement

DECEMBER 31, 2017

Revenues

Service revenue

$11,590

Expenses

Salaries and wages expense $6,840

Rent expense2,260

Depreciation expense 145

Interest expense83

9,328

Net Income

$2,262

03

(b) Preparing a statement of retained earnings

ANDERSON COOPER CO.

Retained Earnings Statement

DECEMBER 31, 2017

Retained earnings on January 1

$11,310

Add: Net Income

2,262

13,572

Less: Dividends

3,000

Retained earnings, December 31

$10,572

04

(c) Preparing a classified balancesheet

ANDERSON COOPER CO.

Balance Sheet

DECEMBER 31, 2017

Assets

Current assets

Cash

$19,472

Accounts receivables

6,920

Prepaid rent

2,280

Total current assets

28,672

Property, plant, and equipment

Equipment $18,050

Accumulated depreciation-equipment (4,895)

13,155

Total assets

$41,827

Liabilities and stockholders鈥� Equity

Current liabilities

Account payable

$5,472

Interest payable

83

Total current liabilities

5,555

Non-current liabilities

Notes payable

5,700

Total non-current liabilities

5,700

Total liabilities

$11,255

Stockholders鈥� equity

Common stock $20,000

Retained earnings 10,572

30,572

Total liabilities and stockholders鈥� equity

$41,827

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Most popular questions from this chapter

When salaries and wages expense for the year is computed, why are beginning accrued salaries and wages subtracted from, and ending accrued salaries and wages added to, salaries and wages paid during the year?

Do the following events represent business transactions?

Explain your answer in each case

  1. A computer is purchased on account.
  2. A customer returns merchandise and is given credit on account.
  3. A prospective employee is interviewed
  4. The owner of the business withdraws cash from the business for personal use.
  5. Merchandise is ordered for delivery next month.

Agazzi Repair Shop had the following transactions during the first month of business as a proprietorship. Journalize the transactions. (Omit explanations.) Aug. 2 Invested \(12,000 cash and \)2,500 of equipment in the business. 7 Purchased supplies on account for \(500. (Debit asset account.) 12 Performed services for clients, for which \)1,300 was collected in cash and \(670 was billed to the clients. 15 Paid August rent \)600. 19 Counted supplies and determined that only $270 of the supplies purchased on August 7 are still on hand.

(LO5) (Closing Entries) Presented below is information related to Gonzales Corporation for the month of January 2017.

Cost of Goods sold \( 208,000 Salaries and wages expenses \)61,000

Delivery expenses \( 7,000 Sales discounts \) 8,000

Insurance expenses \( 12,000 Sales returns and allowances \)13,000

Rent expenses \( 20,000 Sales revenue \)350,000

Instructions:

Prepare the necessary closing entries.

Question: E3-16 (L05) (Closing Entries for a Corporation) Presented below are selected account balances for Homer Winslow Co. as of December 31, 2017.

Inventory 12/31/17 \(60,000 Cost of Goods Sold \)225,700

Common Stock \(75,000 Selling Expenses \)16,000

Retained Earnings \(45,000 Administrative Expenses \)38,000

Dividends \(18,000 Income Tax Expenses \)30,000

Sales Returns and

Allowances \(12,000

Sales Discounts \)15,000

Sales Revenue $410,000

Instructions:

Prepare closing entries for Homer Winslow Co. on December 31,2017. (Omit explanations)

See all solutions

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