Question

RETL 261 –FINAL EXAM PROBLEMS

1. FINANCIAL STATEMENTS

The Trial Balance for Greengrass Lawn Care Company after second year of operations:

       Greengrass Lawn Care Company

Trial Balance

December 31, 2017

                                                                                    Debit                Credit

Cash                                                                            $ 4,500

Accounts Receivable                                                     5,100

Prepaid Insurance                                                         2,100

Equipment                                                                    21,000

Notes payable                                                                                       4,300

Accounts payable                                                                                  10,200

Unearned Service Revenue                                                                              2,000

K. Johnson, capital                                                                                20,000

K. Johnson, withdrawals                                                12,000

Service Revenue                                                                                   28,000

Advertising Expense                                                      1,800

Rent Expense                                                                3,400

Salaries Expense                                                           9,000

Utilities Expense                                                            5,600              _____

                                                                                    $64,500            $64,500

1. Using the information from the trial balance, determine the amount of net income (or Net Loss) for Greengrass Lawn Care Company for the year. You do not have to prepare an income statement.

2. Using the information from the trial balance, determine the ending balance for K Johnson, Capital for the year ended December 31, 2017. You do not have to prepare a Statement of Changes in Owner’s Equity for Greengrass Lawn Care Company.

3. How does the date in the heading of an Income Statement differ from the date in the heading of a Balance Sheet?

4. Using the information from the trial balance, what is the total amount of assets for Greengrass Lawn Care Company?  

5. Using the information from the trial balance, what is the total amount of liabilities for Greengrass Lawn Care Company?

     

6. Using your answers from B, D, and E, illustrate the formula (equation) for the balance sheet. Use dollar amounts.

Answer 1

A.

Net Income
Service Revenue	$        28,000
Less:
Advertising Expense	$          1,800
Rent Expense	$          3,400
Salaries Expense	$          9,000
Utilities Expense	$          5,600
Total Expenses	$        19,800
Net Income	$          8,200

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B.

K. Johnson, Capital
Beginning Balance	$           20,000
Add: Net Income	$             8,200
Less: Withdrawals	$         -12,000
Ending Balance	$           16,200

-

**Net Income

Computed in Part A

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C.

Entities prepare the balance sheet and the income statement periodically at the end of each accounting period. A balance sheet relates to a specific date within an accounting period, while an income statement is illustrate about a particular period. Balance sheet is uses to report financial position that can be measured only at a point in time, and the income statement uses to report financial performance that is happened often over a period of time.

(for example, date of Income statement will be like " for the year ended 31st December 2xx1 or / for the month ended 31st December 2xx1 "

while date of Balance sheet will be like " As at 31st December 2xx1 " )

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D.

Total Assets
Cash	$             4,500
Accounts Receivable	$             5,100
Prepaid Insurance	$             2,100
Total Current Assets	$           11,700
Equipment	$           21,000
Total Non-Current Assets	$           21,000
Total Assets	$           32,700

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E.

Total Liabilities
Notes payable	$             4,300
Accounts payable	$           10,200
Unearned Service Revenue	$             2,000
Total Liabilities	$           16,500

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F.

Total Assets	=	Total Liabilities	+	Total Equity/Owners capital
$                 32,700		$              16,500		$                                         16,200

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Hope you Understood.
If you have any doubt please leave a comment.

Thank you...