Question

Assume that you are the president of APEC Aerospace Corporation. At the end of the first year of operations (December 31), the following financial data for the company are available:

Accounts Payable	$	33,130
Accounts Receivable		9,500
Cash		13,900
Common Stock		10,000
Dividends		1,100
Equipment		86,000
Notes Payable		51,220
Operating Expenses		60,000
Other Expenses		8,850
Sales Revenue		94,000
Supplies		9,000

Required information

Required:

1.	Prepare an income statement for the year ended December 31.

2.	Prepare a statement of retained earnings for the year ended December 3

3.	Prepare a balance sheet at December 31.

Answer 1

1) Prepare an income statement for the year ended December 31.

Sales revenue		94000
Expenses :
Operating expense	(60000)
Other expense	(8850)
Total expense		(68850)
Net income		25150

2) Prepare a statement of retained earnings for the year ended December 31

Beginning retained earnings	0
Add: Net income	25150
Less; Dividend	(1100)
Ending retained earnings	24050

3) Prepare a balance sheet at December 31.

Assets
Current assets
Cash	13900
Account receivable	9500
Supplies	9000
Total Current assets		32400
Non current assets
Equipment	86000
Total non current assets		86000
Total Assets		118400
Liabiltiies and stockholder's equity
Current liabitlies
Account payable	33130
Total current liabitites		33130
Long term liabitlites
Notes payable	51220
Total long term liabitlies		51220
Total liabitlies		84350
Shareholder's equity
Common stock	10000
Retained earnings	24050
Total shareholder's equity		34050
Total liabitlies and shareholder's equity		118400