Question

works weddings and prom-type parties. The balance of AbbottAbbott , Capital was $ 14 comma 000$14,000 at DecemberDecember 3131 , 20132013. At DecemberDecember 3131 , 20142014 , the business's accounting records show these balances: Prepare the following financial statements for Picture GalleryPicture Gallery for the year ended DecemberDecember 3131 , 20142014 : a. Income statement b. Statement of owner's equity c. Balance sheet

Insurance Expense

$4,000

Accounts Receivable

$13,000

Cash

43,000

Notes Payable

16,000

Accounts Payable

12,000

Abbott, Capital, Dec. 31, 2014

?

Advertising Expense

4,500

Salaries Expense

26,000

Service Revenue

100,000

Equipment

62,500

Abbott, Withdrawals

17,000

Owner contribution, 2014

28,000

Answer 1

Answer a.
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Income Statement
For the Period Ended Dec 31, 2014
Revenue:
Service Revenue		100,000
Expenses:
Insurance Expenses	4,000
Advertising Expenses	4,500
Salaries Expenses	26,000	34,500
Net Income		65,500
Answer b.
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Statement of Owners' Equity
For the Year Ended Dec 31, 2014
Abbott Capital - Dec 31, 2013	14,000
Owner Contribution, 2014	28,000
Net Income	65,500
Sub-total	107,500
Abbott Withdrawls	(17,000)
Abbott Capital - Dec 31, 2014	90,500
Answer c.
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Balance Sheet
For the Year Ended Dec 31, 2014
Assets
Current Assets
Cash	43,000
Accounts Receivable	13,000	56,000
Property, Plant & Equipment
Equipment		62,500
Total Assets		118,500
Liabilities & Owners' Equity
Liabilities
Current Liabilities
Accounts Payable		12,000
Long Term Liabilities
Notes Payable		16,000
Total Liabilities		28,000
Owner's Equity		90,500
Total Liabilities & Owners' Equity		118,500