Question

Maxwell Engineering is an enginering firm. Following are the amount of the assets and liabilities maxwell engineering at december 31, the end of the current year, and its revenue and expenses for the year ended on that date. The capital of Mack Maxwell, owner, was $84,950 at January 1, the beginning of the current year, the owner withdrew $50,000 durinng the current year.

Accounts payable     $13,100

Accounts revievable    $52,000

Advertising expense $7,500

CASH               $37,200

Fees earned     $ 329,250

land     $90,000

Miscellaneous expense $1,250

Rent expense $42,000

supplies        $6,750

Supplies expenses    $13,800

taxes expenses    10,500

utilities expense     18,100

wagees expense   99,700

wages payable   1,500

a. Prepare an income statement for the current year ended December 31

b. Prepare a statement of owners equity for the current year ended December 31

c. Prepare a balance sheet as of December 31 of the current year

Answer 1

1.

Maxwell Engineering
Income Statement
For the year ended December 31
Fees earned		$ 329,250
Less: Expenditure
Advertising expenses	$    7,500
Miscllaneous expenses	$    1,250
Rent expenses	$ 42,000
Supplies expenses	$ 13,800
Taxes expenses	$ 10,500
Utilities expenses	$ 18,100
Wages expenses	$ 99,700
Total expenses		$ 192,850
Net Income		$ 136,400

2.

Maxwell Engineering
Statement of Owners Equity
As at December 31
Beginning Balance	$    84,950
Add: Current year net income	$ 136,400
Less: Withdrawals	$ (50,000)
Ending balance	$ 171,350

3.

Maxwell Engineering
Balance Sheet
As at December 31
Assets		Liabilities
Current Assets:		Current Liabilities:
Accounts Receiveble	$    52,000	Accounts Payable	$    13,100
Supplies	$      6,750	Wages payable	$      1,500
Cash	$    37,200	Total Liabilities	$    14,600
Total Current Assets	$    95,950
Property, Plant and Equipment		Owners Equity
Land	$    90,000	Capital account	$ 171,350
Total Assets	$ 185,950	Total Liabilities and Owners equity	$ 185,950

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