Question

The amounts of the assets and liabilities of Nordic Travel Agency at December 31, 2019, the end of the year, and its revenue and expenses for the year follow. The capital of Ian Eisele, owner, was $655,000 on January 1, 2019, the beginning of the year. During the year, Ian withdrew $35,000.

Accounts payable $73,500
Accounts receivable 288,000
Cash 186,000
Fees earned 905,900
Land 542,000
Miscellaneous expense 6,600
Rent expense 30,000
Supplies 5,100
Supplies expense 4,200
Utilities expense 26,500
Wages expense 511,000
Required:
1. Prepare an income statement for the year ended December 31, 2019.*
2. Prepare a statement of owner’s equity for the year ended December 31, 2019.*
3. Prepare a balance sheet as of December 31, 2019.*
4. What item appears on both the statement of owner’s equity and the balance sheet?

Answer 1

Income Statement:
Revenue
Fees earned			905900
Expenses:
Rent expenses		30000
Supplies expenses		4200
Utilities expenses		26500
Wages expenses		511000
Misc expenses		6600
Total expenses			578300
Net income			327600
Statement of Owner's Equity:
Beginning balance of Capital			655000
Add: Net Income			327600
Ssub total			982600
Less: Drawings			35000
Ending balance of Owner's capital			947600
Balance Sheet:
Assets:
Cash		186000
Accounts receivable		288000
Supplies		5100
Total current assets			479100
Land			542000
Total assets			1021100
Liabilities and Equity:
Liabilities:
Accounts Payable			73500
Owner's equity
Owner capital			947600
Total liabilities and Equity			1021100
Owner's capital is the item appearing both in Statement of Owner's equity and Balance sheet