Question

. Your business, called “Hot Dog Stand, Inc.” is set up as a corporation. You each put in $150 of your own money ($600 altogether.)

The business purchases the following items:

• 200 hot dogs at $1.00 each.

• 200 hot dog buns for $30.00

• 100 cans of soda pop for $35.00

• Condiments costing $25.00

At the end of the week, the business sold 140 hot dogs for $3.00 each and all the soda pop cans for $1.00 each. All of the condiments have been used.

1. What was total assets?
2. What was total liabilities
3. What was total equity
4. What was net income?
5. What was retained earnings?

Answer 1

Balance Sheet
Liabilities	Amount	Assets	Amount
Equity	600	Cash	830
Profit and Loss account	320	Inventory	90
Total	920	Total	920
Profit and loss account
Particulars		Amount
Sales		520
(140*3+100*1)
less: Purchases
200*1 Hot Dogs	200
200 Hot Dog bun	30
100 Soda Pop	35
Condiment	25	290
Add: Closing Inventory (60*1 Hot dog + 200 hot dog bun @ 30)		90
Net Income		320
Cash A/c
Particulars		Amount
Opening		600
Sales		520
Purchase		-290
Balance		830
Total Assets	920
Total Liabilities	920
Total Equity	600
Net Income	320
Retained Earning	-