Question

Prepare an Income Statement and Balance Sheet for Kidgets Tour Servicesbased on the following information. Your boss would also like you to write a brief paragraph on how you think the company could improve its profitability.

Account	Amount	Account	Amount
Accounts Payable	95,000	Land	500,000
Accounts Receivable	24,000	Accumulate Depreciation Equip	55,000
Advertising Expense	33,000	Common Stock	250,000
Cash	100,000	Equipment	350,000
Depreciation	15,000	Goodwill	86,000
Fuel	22,000	Insurance Expense	75,000
Interest Expense	5,000	Tax Rate	40%
Marketable Securities	10,000	Retained Earnings	175,000
Marketing Expense	98,000	Short term notes payable	82,000
Prepaid Rent	15,000	Mortgage	489,000
Tour Service Revenue	325,000	Tax Payable	32,000
Unearned revenue	10,000	Interest Revenue	18,000
Wages Payable	22,000	Inventory	125,000

Answer 1

Answer: For Balance Sheet and Income Statement, please refer the uploaded image.

Brief paragraph on how the company could improve its profitability:

If the company want to increase its profitability and cash flow in the business, it must welcome change. It must become a learning company that thirsts for knowledge that helps it learn how to do things better and faster while improving its quality and productivity.

There are four key areas that can help drive profitability. These are reducing costs, increasing turnover, increasing productivity, and increasing efficiency. You can also expand into new market sectors, or develop new products or services.