Question

The amounts of the assets and liabilities of Nordic Travel Agency at December 31, 2019, the end of the year, and its revenue and expenses for the year follow. The capital of Ian Eisele, owner, was $645,000 on January 1, 2019, the beginning of the year. During the year, Ian withdrew $37,000.

Accounts	Amounts
Accounts payable	$73,000
Accounts receivable	277,000
Cash	191,500
Fees earned	918,700
Land	547,000
Miscellaneous expense	6,000
Rent expense	34,000
Supplies	6,000
Supplies expense	4,200
Utilities expense	29,000
Wages expense	505,000

	Required:
1.	Prepare an income statement for the year ended December 31, 2019.*
2.	Prepare a statement of owner’s equity for the year ended December 31, 2019.*
3.	Prepare a balance sheet as of December 31, 2019.*
4.	What item appears on both the statement of owner’s equity and the balance sheet? * Refer to the information given and the lists of Accounts, Labels, and Amount Descriptions provided for the exact wording of the answer choices for text entries. Be sure to complete the statement heading. If a net loss is incurred or there is a decrease in owner’s equity, enter that amount as a negative number using a minus sign.

Answer 1

1) Income Statement :-

Particulars	Amount($)	Amount($)
Revenue (Fees Earned) (A)		918700
Less : Expenses
Rent Expense	34000
Wages Expense	505000
Utilities Expense	29000
Supplies Expense	4000
Miscellaneous Expense	6200
Total Expenses (B)	578200	578200
Net Income (A-B)		340500

2) Statement of Owenr's Equity :-

Particulars	Amount ($)
Beginning Capital	645000
Add : Net Income	340500
Less : Withdrew	(37000)
Ending Capital	948500

3) Balance Sheet :-

Assets	Amount($)	Liabilities and Equity	Amount($)
Current Assets :-		Current Liabilities :-
Cash	191500	Accounts Payable	73000
Supplies	6000	Shareholder's Equity:-
Accounts Receivable	277000	Capital	948500
Fixed Asset :-
Land	547000
Total Assets	1021500	Total Liabilities and Equity	1021500

4) The item that appears in both statements is the capital amount of $948500, and also the amount by accounts receivable is the same then the increase in Owner's Equity.