Question

MATTHEWS LANES Work Sheet For Year Ended June 30
Account	Income Statement		Balance Sheet
	Dr	Cr	Dr	Cr
Cash			12,275
Accounts receivable			1,750
Office supplies			1,800
Prepaid insurance			3,400
Scoring equipment			140,000
Accumulated depreciation –      scoring equipment				21,700
Salaries payable				2,800
Common stock				20,000
Retained earnings (unadjusted)				40,000
Dividends			46,425
Bowling revenue		138,075
Depreciation expense –      scoring equipment	10,825
Salaries expense	1,800
Insurance expense	1,200
Rent expense	1,600
Office supplies expense	400
Repairs expense	350
Telephone expense	750
Totals	16,925	138,075	205,650	82,500
Net income	121,150			121,150
Totals	138,075	138,075	205,650	205,650

1. Net Income:
2. Ending Balance Retained Earnings:
3. Total Assets or Total Liabilities and Owners’ Equity:

Answer 1

Net Income                                              [Refer working note 1]	$121,150
Ending Balance Retained Earnings          [Refer working note 2]	$114,725
Total Assets                                             [Refer working note 3]	$137,525
Total Liabilities and Owners’ Equity       [Refer working note 4]	$137,525

.

.

Working note 1 - Net Income:
Bowling revenue		$138,075
Expenses:
Depreciation expense – Scoring equipment	$10,825
Salaries Expense	$1,800
Insurance Expense	$1,200
Rent Expense	$1,600
Office supplies Expense	$400
Repair Expense	$350
Telephone Expense	$750
Total expenses		$16,925
Net Income         [$138,075 - $16,925]		$121,150

.

.

Working note 2 - Ending Balance Retained Earnings:
Retained earnings, beginning balance	$40,000
Add: Net income             [Refer working note1]	$121,150
	$161,150
Less: Dividends	$46,425
Retained earnings, ending balance	$114,725

.

.

Working note 3 - Total Assets
Cash	$12,275
Accounts Receivable	$1,750
Office supplies	$1,800
Prepaid insurance	$3,400
Scoring equipment, net    [Cost - Accumulated depreciation = $140,000 - $21,700]	$118,300
Total assets	$137,525

.

.

Working note 4 - Liabilities and Stockholders' Equity
Salaries payable	$2,800
Common Stock	$20,000
Retained Earnings      [Refer working note 2]	$114,725
Total Liabilities and Owners’ Equity	$137,525