Question

Following is a list of financial statement items and amounts for Vantage Service as of 12/31/Year 1, the end of its first year in operation.

Accounts Receivable $ 41,300

Accounts Payable 31,300

Cash 10,130

Common Stock 21,300

Notes Payable 10,260

Equipment 50,650

Sales Revenue 106,500

Fuel Expense 10,130

Rent Expense 11,200

Advertising Expense 5,130

Salaries and Wages Expense 21,300

Retained Earnings ?

Dividends 19,520

Required: Prepare the Income Statement for the year ended December 31, Year 1.    Prepare the statement of retained earnings for the year ended December 31, Year 1.    Prepare the balance sheet for the year ended December 31, Year 1.

Answer 1

VANTAGE SERVICE
Income Statement
For the Year Ended December 31, Year 1
Sales Revenue		106,500
Less: Expenses
Fuel Expense	10,130
Rent Expense	11,200
Advertising Expense	5,130
Salaries and Wages Expenses	21,300
Total Expenses		47,760
Net Income		58,740
VANTAGE SERVICE
Statement of Retained Earnings
For the Year Ended December 31, Year 1
Retained Earnings, Opening		-
Add/Less: Net Income/(Loss)	58,740
Less: Dividend	19,520	39,220
Retained Earnings, Closing		39,220
VANTAGE SERVICE
Balance Sheet
December 31, Year 1
Assets
Current Assets:
Cash		10,130
Accounts receivable		41,300
Total current assets			51,430
Property, plant, and equipment
Equipment		50,650
Less: Acc. Dep. - Equipment		-
Property, plant and equipment, Net			50,650
Total Assets			102,080
Liabilities
Current Liabilities:
Accounts Payable	31,300
Total Current Liabilities		31,300
Long-term Liabilities:
Notes Payable		10,260
Total liabilities			41,560
Shareholders' Equity
Common Stock		21,300
Retained Earnings		39,220
Total Shareholders' Equity			60,520
Total Liabilities and Shareholders' Equity			102,080