Question

The following information relates to YogaGuru for the year ended 30 June 2020.

Prepaid rent	14,500
Accounts payable	52,700
Electricity expense	7,500
Unearned revenue	11,600
Wages payable	12,500
Accumulated depreciation- Equipment	8,600
Capital	?
Rent expense	32,000
Cash at bank	75,800
Wages expense	135,400
Supplies	3,900
Service revenue	282,600
Bank Loan (due in 2025)	38,000
Accounts receivable	7,500
Drawings	4,000
Equipment	235,200
Depreciation expense-Equipment	8,600

Required: Prepare an Income Statement , a fully classified Balance Sheet in narrative format and a Statement of Changes in Equity for the year ended 30 June 2020 for YogaGuru.

Income Statement:

Fully narrative Balance Sheet:

Statement of Changes in Equity

Answer 1

Answer :

Income Statement

Particulars	Amount
Revenue :
Service revenue	$282,600
Expense :
Electricity expense	($7,500)
Rent expense	($32,000)
Wages expense	($135,400)
Depreciation expense-Equipment	($8,600)
Net Profit	$99,100

Balance Sheet

	Amount
Assets
Current Assets :
Cash at bank	$75,800
Prepaid rent	$14,500
Accounts receivable	$7,500
Supplies	$3,900
Non-Current Assets :
Equipment $235,200
Less : Acc. Dep. ($8,600)	$226,600
Total Assets	$328,300
Liabilities and Owners' Equity
Current liabilities :
Accounts payable	$52,700
Unearned revenue	$11,600
Wages payable	$12,500
Non-Current liabilities :
Bank Loan (due in 2025)	$38,000
Owners' equity :
Capital (Balancing figure)	$213,500
Total Liabilities and Owners' Equity	$328,300

Statement of Changes in Equity

Particulars	Amount
Capital (beginning) (Note)	$118,400
Add : Net Profit	$99,100
Less : Drawings	$4,000
Capital (ending)	$213,500

Note :

As the beginning capital is not given, first we have to calculate it.

Calulation of Beginning capital :

= Capital (ending) + Drawings - Net Profit

= $213,500 + $4,000 - $99,100

= $118,400