Question

Please create a retained earnings statement, income statement, and a balance sheet for the month of December following accounts and their ending balances.

Cash (debit) : $37,308.90

Accounts Receivable (debit) : $11,700

Notes Receivable (debit) : $10,000

Interest Receivable (debit) : $41.67

Merchandise Inventory (debit) : $3,150

Prepaid Advertising (debit) : $250

Office Supplies Inventory (debit) : $180

Prepaid Insurance (debit) : $1,100

Land (debit) : $59,500

Equipment (debit) : $12,000

Accumulated Depreciation - Equipment (credit) : $116.66

Accounts Payable (credit) : $10,000

Unearned Rent Revenue (credit) : $525

Salaries and Wages Payable (credit) : $984

Sales Tax Payable (credit) : $288.75

Interest Payable (credit) : $737.50

Dividends Payable (credit) : $2,000

Notes Payable (credit) : $60,000

Common Stock (credit) : $40,000

Sales (credit) : $45,600

Rent Revenue (credit) : $75

Cost of Goods Sold (debit) : $25,650

Advertising Expense (debit) : $50

Store Wages Expense (debit) : $6,232

Depreciation Expense (debit) : $116.66

Interest Expense (debit) : $737.50

Insurance Expense (debit) : $100

Office Supplies Expense (debit) : $20

Rent Expense (debit) : $200

Gain on Sale of Land (credit) : $4,500

Interest Revenue (credit) : $41.67

Losses from fire (debit) : $1,800

.

The ending balance for the Income Statement is $15,310.51

The ending balance for the Retained Earnings is $20,578.66

The ending balance for the Balance Sheet is $135,113.91

.

Please show your work on how these ending balances are obtained. Thank you.

Answer 1

a)
Income statement
Sales		$        45,600.00
Less: Cost of Good sold		$        25,650.00
Gross Profit		$        19,950.00
Add: Other Operating Revenue
Rent Revenue		$               75.00
		$        20,025.00
Less: Operating Expenses
Advertising Expense	$        50.00
Store Wages Expense	$   6,232.00
Depreciation Expense	$      116.66
Insurance Expense	$      100.00
Office Supplies Expense	$        20.00
Rent Expense	$      200.00
Total operating Expenses		$          6,718.66
Operating Income		$        13,306.34
Non Operating Income and Other
Interest Revenue	41.67
Interest Expense	-737.5
Gain on Sale of Land	4500
Losses from fire	-1800
Total Non operating Income		2004.17
Net Income		$        15,310.51
Retained Earning
Beginning Retained Earning	$   5,268.15
Net Income	$ 15,310.51
Ending Retained Earning	$ 20,578.66
Balance Sheet
Assets			Liabilities & Equity
Cash		$        37,308.90	Accounts Payable	$           10,000.00
Accounts Receivable		$        11,700.00	Unearned Rent Revenue	$                525.00
Notes Receivable		$        10,000.00	Salaries and Wages Payable	$                984.00
Interest Receivable		$               41.67	Sales Tax Payable	$                288.75
Merchandise Inventory		$          3,150.00	Interest Payable	$                737.50
Prepaid Advertising		$             250.00	Dividends Payable	$             2,000.00
Office Supplies Inventory		$             180.00	Notes Payable	$           60,000.00
Prepaid Insurance		$          1,100.00	Owners Equity
Land		$        59,500.00	Common Stock	$           40,000.00
Equipment	$ 12,000.00		Retained Earnings	$           20,578.66
Accumulated Depreciation - Equipment	$    (116.66)	$        11,883.34
Total Assets		$     1,35,113.91	Total Liabilities & Equity	$        1,35,113.91