Question

Falcon Consultants, Inc., has provided the following list of assets, liabilities, revenues, and expenses from its December 31, 2017, accounting records. The beginning retained earnings as of January 1, 2017, was $45,000 and the owner, Lucky Falcon, received dividends of $14,000 during the year.

Required:

Prepare the income statement, the statement of retained earnings and the balance sheet for Falcon Consultants, Inc., as of December 31, 2017.

            Accounts receivable      $16,300            Service revenue            $67,500

            Interest expense                2,800            Cash                            30,000

            Supplies                           2,750            Note payable                19,400

            Accounts payable             5,450            Salary expense               22,000

            Utilities expense               4,500            Interest payable               1,600

            Furniture                      20,000            Rent expense                  13,200

            Salary payable                  3,600            Automobiles                24,900

            Common stock             40,200            Land                            36,000

Answer 1

• • Income Statement for the year ended 31 Dec 17

  Service Revenue	$           67,500.00
  Expenses:
  Salary Expenses	$           22,000.00
  Rent Expense	$           13,200.00
  Utilities expenses	$             4,500.00
  Interest Expense	$             2,800.00
  Total Expenses	$           42,500.00
  Net Income	$           25,000.00

  • Statement of Retained Earnings for the year ended 31 Dec 17

  Beginning Balance		$          45,000.00
  Add: Net Income	$           25,000.00
  Less: Dividend	$           14,000.00
  Net Increase (decrease)		$          11,000.00
  Ending Balance		$          56,000.00

  • Balance Sheet, as at 31 Dec 17

  ASSETS
  Current Assets:
  Cash	$           30,000.00
  Accounts receivables	$           16,300.00
  Less: Allowance for doubtful Accounts [balancing figure]	$           (3,700.00)
  Supplies	$             2,750.00
  Total Current Assets		$          45,350.00
  Property, Plant& Equipment:
  Land	$           36,000.00
  Automobiles	$           24,900.00
  Furniture	$           20,000.00
  Total PPE		$          80,900.00
  Total Assets		$        126,250.00
  LIABILITIES
  Current Liabilities:
  Accounts Payable	$             5,450.00
  Salary Payable	$             3,600.00
  Interest payable	$             1,600.00
  Total Current Liabilities		$          10,650.00
  Notes Payable		$          19,400.00
  Total Liabilities		$          30,050.00
  STOCKHOLDERS' EQUITY
  Common Stock	$           40,200.00
  Retained earnings - Ending balance	$           56,000.00
  Total Stockholder's Equity		$          96,200.00
  Total Liabilities & Stockholder's Equity		$        126,250.00