Question

Part 3 - Problems 1. The account balances for Dave's Golf Shop as of December 31, 2019 were as follows: Accounts Payable Accounts Receivable Cash Common Stock Dividends Equipment Insurance Expense Interest Expense Note Payable (Due 6/30/21) Rent Expense Retained Earnings 1/1/2019 Revenue Salary Expense Salary Payable Supplies Supplies Expense Utilities Expense 4,800 12,600 27,800 19,200 8,200 1,200 11,000 8,000 6,500 15,400 0 53,000 2,500 14,200 5,000 4,000 2,000 equired: (a)Prepare an Income Statement, Statement of etained Earnings and Balance Sheet for Dave's Golf Shop good form (b) What is the Working Capital? (20 Points)

Answer 1

Solution: 1
	INCOME STATEMENT
	Revenue :
	Sales Revenue		$             53,000
	Less: Expenses
	Insurance Expenses	$               11,000
	Interest Expenses	$                 8,000
	Rent Expenses	$               15,400
	Salary Expenses	$                 2,500
	Supplies Expenses	$                 4,000
	Utilities Expenses	$                 2,000
	Total Expenses		$             42,900
	Net Income		$             10,100
Solution: 2
	Statement of Retained Earnings
		AMOUNT
	Beginning Balance	$                        -
	Add: Net Income of the year	$               10,100
	Less: Dividends	$                 8,200
	Ending balance of Retained Earnings	$                 1,900
Solution: 3
	BALANCE SHEET
	ASSETS	AMOUNT	AMOUNT
	CURRENT ASSETS:
	Cash	$               27,800
	Account Receivable	$               12,600
	Supplies	$                 5,000
			$             45,400
	FIXED ASSETS:
	Equipment	$                 1,200
	Total		$                1,200
	TOTAL OF ASSETS		$             46,600
	LIABILITIES & SHAREHOLDER'S EQUITY	AMOUNT	AMOUNT
	CURRENT LIABILITIES:
	Account Payable	$                 4,800
	Salary Payable	$               14,200
			$             19,000
	LONG TERM LIABILITIES
	Note Payable (Due 6/30/2021)		$                6,500
	Shareholder's Equity
	Common Stock	$               19,200
	Retained Earnings	$                 1,900
	Total Shareholder's Equity		$             21,100
	TOTAL OF LIABILITES & SAHREHOLDER'S EQUITY		$             46,600
Solution: 4
	Working Capital = Current Assets - Current Liabilities
	CURRENT ASSETS:
	Cash	$               27,800
	Account Receivable	$               12,600
	Supplies	$                 5,000
		$               45,400
	Less:
	CURRENT LIABILITIES:
	Account Payable	$                 4,800
	Salary Payable	$               14,200
	Total	$               19,000
	Working Capital	$               26,400