Question

In 2019, Michael Knight organized Knight Realty. At December 31, 2019, the end of the current fiscal year, the trial balance of Knight Realty is as follows:

Knight Realty
Unadjusted Trial Balance
December 31, 2019
Account Title									Debit	Credit
	Cash								$      3,425
	Accounts Receivable								7,000
	Supplies								1,270
	Prepaid Insurance								620
	Office Equipment								51,650
	Accumulated Depreciation-Office Equipment									$      9,700
	Accounts Payable									925
	Unearned Fees									1,250
	Michael Knight, Capital									29,000
	Michael Knight, Drawing								5,200
	Fees Earned									59,125
	Wages Expense								22,415
	Rent Expense								4,200
	Utilities Expense								2,715
	Miscellaneous Expense								1,505
									$  100,000	$  100,000

Data needed to determine year-end adjustments are as follows:

a.	Supplies on hand at December 31, 2019, are $380.
b.	Insurance premiums expired during the year are $315.
c.	Depreciation of equipment during the year is $4,950.
d.	Wages accrued but not yet paid at December 31, 2019, are $440.
e.	Accrued fees earned but not yet recorded at December 31, 2019, are $1,000.
f.	Unearned fees on December 31, 2019, are $750.

Required:
3.	Prepare an income statement, statement of owner's equity, and statement of financial
	position (balance sheet)

Answer 1

Income Statement
Revenue
Fees Earned	$             60,625
Total Revenue		$             60,625
Expenses
Wages Expense	$             22,855
Rent Expense	$                4,200
Utilities Expense	$                2,715
Supplies Expense	$                   890
Insurance Expense	$                   315
Depreciation Expense	$                4,950
Miscellaneous Expense	$                1,505
Total Expenses		$             37,430
Net Income		$             23,195

Statement of Owner's Equity
Beginning Balance, Capital	$             29,000
Add: Net Income	$             23,195
	$             52,195
Less : Drawings	$                5,200
Ending Balance, Capital	$             46,995

Balance Sheet
Assets
Current Assets
Cash	$                3,425
Accounts Receivable	$                8,000
Supplies	$                   380
Prepaid Insurance	$                   305
Total Current Assets		$             12,110
Office Equipment	$             51,650
Less : Accumulated Depreciation	$            -14,650
Total Property Plant and Equipment		$             37,000
Total Assets		$             49,110
Liabilities & Stockholder's Equity
Current Liabilities
Accounts Payable	$                   925
Wages Payable	$                   440
Unearned Rent	$                   750
Total Current Liabilities		$                2,115
Long term Debt		$                      -
Owner's Equity
Michael Knight, Capital	$             46,995
Total Owner's Equity		$             46,995
Total Liabilities & Owner's Equity		$             49,110