Financial Accounting, Student Value Edition (5th Edition)
5th Edition
ISBN: 9780134728520
Author: Robert Kemp, Jeffrey Waybright
Publisher: PEARSON
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Textbook Question
Chapter 1, Problem 34AP
Preparing the income statement and
Presented here are the amounts of Assets, Liabilities, Stockholders’ Equity, Revenues, and Expenses of Extreme Sports, Inc., at October 31, 2018 The items are listed in alphabetical Order.
Accounts Payable................ | $ 18,000 | Interest Expense..................... | $ 5,500 |
Accounts Receivable .......... | 14,000 | Land........................................ | 35,000 |
Advertising Expense............ | 19,000 | Note Payable.......................... | 65,000 |
Building............................... | 125,000 | Property Tax Expense........... | 4,300 |
Cash.................................... | 18,000 | Rent Expense......................... | 22,000 |
Common Stock...................... | 20,000 | Salaries Expense.................... | 61,000 |
Dividends............................... | 36,000 | Salaries Payable..................... | 6,000 |
Equipment.............................. | 50,000 | Service Revenue..................... | 190,000 |
Insurance Expense............... | 2,800 | Supplies................................... | 1,300 |
The retained earnings balance of the business was $94,900 at October 31, 2017.
Requirements
- 1. Identify each amount shown as an asset, liability, or
stockholders equity . - 2. Prepare the company's income statement and statement of retained earnings for the year ended October 31, 2018.
- 3. Prepare the company's balance sheet at October 31, 2018.
- 4. Answer these questions about the company.
- a. What was the profit or loss for the year?
- b. What was the increase or decrease of retained earnings for the year?
- c. What is the amount of economic resources on October 31, 2018?
- d. What is the amount owed on October 31, 2018?
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Chapter 1 Solutions
Financial Accounting, Student Value Edition (5th Edition)
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