Question

Below are incomplete financial statements for Cyclone, Inc. Required: Calculate the missing amounts. CYCLONE, INC. Income Statement Year ended Dec. 31, 2021 Revenues Expenses: Salaries $ 12,000 Rent 6,000 Advertising 4,000 Net income

Answer 1

Requirement 1:

CYCLONE, INC.
Income Statement
Year ended Dec. 31,2021
Revenues	$26,000
Expenses:
Salaries	$12,000
Rent	$6,000
Advertising	$4,000
Net income	$4,000

Explanation:

Net income taken from 'Statement of stockholders' equity'.

Revenues = Net income + Expenses = $4,000+ (12,000+6,000+4,000) = $26,000

Requirement 2:

CYCLONE, INC.
Statement of Stockholders' Equity
Year ended Dec. 31,2021
	Common Stock	Retained Earnings	Total Stockholders' Equity
Beginning balance	$13,000	$6,000	$19,000
Issuance of stock	$2,000		$2,000
Add: Net income		$4,000	$4,000
Less: Dividends		($3,000)	($3,000)
Ending balance	$15,000	$7,000	$22,000

Explanation:

Issuance of stock = Ending balance of common stock - Beginning balance of common stock = $15,000-$13,000= $2,000

Dividends = Beginning balance of 'Retained earnings' + Net income - Ending balance of 'Retained earnings'

= 6,000+4,000-7,000 = $3,000

Requirement 3:

CYCLONE, INC.
Balance Sheet
Dec.31,2021
Assets		Liabilities
Cash	$1,000	Accounts payable	$3,000
Supplies	$4,000	Stockholders' Equity
Land	$5,000	Common stock	$15,000
Building	$15,000	Retained earnings	$7,000
Total assets	$25,000	Total liabilities and stockholders' Equity	$25,000

Explanation:

Total assets = Total liabilities and stockholders' equity

Total assets = $25,000

Supplies = Total assets - cash - land - building = 25,000-1,000-5,000-15,000 = $4,000