Question

The general ledger of Red Storm Cleaners at January 1, 2021, includes the following account balances:

Accounts	Debits				Credits
Cash	$	13,000
Accounts Receivable		6,600
Supplies		2,600
Equipment		17,000
Accumulated Depreciation					$	5,800
Salaries Payable						8,300
Common Stock						18,000
Retained Earnings						7,100
Totals	$	39,200			$	39,200

The following is a summary of the transactions for the year:

1.		March		12		Provide services to customers, $46,000, of which $19,600 is on account.
2.		May		2		Collect on accounts receivable, $16,600.
3.		June		30		Issue shares of common stock in exchange for $4,000 cash.
4.		August		1		Pay salaries of $8,300 from 2020 (prior year).
5.		September		25		Pay repairs and maintenance expenses, $11,600.
6.		October		19		Purchase equipment for $6,600 cash.
7.		December		30		Pay $1,200 cash dividends to stockholders.

The following information is available for the adjusting entries.

Accrued salaries at year-end amounted to $17,500. Depreciation for the year on the equipment is $3,600. Office supplies remaining on hand at the end of the year equal $1,100.

Make an income statement

Answer 1

Red Storm Cleaner
A) Income statement for the year ended 1.1.2021
Accounts Head	working	Amount
Sales revenue	$          46,000.00
Less: Sales Returns	$                         -
Revenue from Operation		$          46,000.00
Less: Expenses
Salaries & Wage expense	$          17,500.00
Depreciation exp-Equipment	$            3,600.00
Supplies expense	$            1,500.00		(2600-1100)
Repair & Maintenance exp	$          11,600.00
		$        (34,200.00)
Profit Before Tax		$          11,800.00
Income tax expense		$                         -
Net Profit	$          11,800.00
Red Storm Cleaner
Balance Sheet as at 1.1.2021
Particulars	working	Amount
Current Asset
Cash	$          32,300.00		(13000+46000-19600+16600+4000-8300-11600-6600-1200)
Account receivable	$            9,600.00		(6600-16600+19600)
Supplies	$            1,100.00
A		$          43,000.00
Non-Current asset
Equipment	$          23,600.00		(17000+6600)
Less: Accumulated Dep	$          (9,400.00)		(-5800-3600)
D		$          14,200.00
Total asset    (A+B+C+D)		$          57,200.00
Current Liabilities
Salary payable	$          17,500.00
A		$          17,500.00
Non-current liabilities
Equity & Retained earning
Common stock           C		$          22,000.00
Retained earning statement
Opening	$            7,100.00
Add: Net income for current year	$          11,800.00
Less: Dividend payable	$          (1,200.00)
D		$          17,700.00
Total Liabilities    (A+B+C)		$          57,200.00	$                     -