Question

a. Photo Gallery works weddings and prom-type parties. The balance of Wood, Capital was $28,000 at December Prepare the following financial statements for Photo Gallery for the year ended December 31, 2018: 31, 2017. At December 31, 2018, the business's accounting records show these balances: Income statement (Click the icon to view the accounts.) b. Statement of owner's equity. Balance sheet. a. Prepare Photo Gallery's income statement. (If a box is not used in the table leave the box empty; do not select a label or enter a zero.) c. X Data Table Insurance Expense $ 11,000 Accounts Receivable $ 9.000 Cash 12,000 ? 44,000 Notes Payable 5,000 Wood, Capital, Dec 31, 2018 1,500 Salaries Expense 70,000 Equipment 9,000 Owner contribution Accounts Payable Advertising Expense Service Revenue Wood, Withdrawals 21,000 52,500 33,000

Answer 1

Ans. A PHOTO GALLERY Income Statement For the Year Ended December 31 2018 Amount Amount $70,000 Particulars Service revenue (a) Less: Expenses: Insurance expense Advertising expense Salaries expense Total expenses (b) Net Income (a - b) $11,000 $1,500 $21,000 $33,500 $36,500 Ans. B PHOTO GALLERY Statement of Owner's Equity For the Year Ended December 31 2018 Particulars Amount Wood capital (Dec. 31, 2017) $28,000 Add: Owner's contribution $33,000 Add: Net income $36,500 $97,500 Less: Owner withdrawals -$9,000 Wood capital (Dec. 31, 2018) $88,500 Ans. C. $53,000 52500 PHOTO GALLERY Balance Sheet For the Year Ended December 31 2018 Assets Current assets: Cash $44,000 Accounts receivables $9,000 Total current assets Property, plant and equipment: Equipment Total property, plant and equipment Total Assets Liabilities and Stockholder's Equity Liabilities: Accounts payable $5,000 Notes payable $12,000 Total Liabilities Stockholder's equity: Wood capital (Dec 31, 2018) $88,500 Total Stockholder's Equity Total Liabilities and Stockholder's Equity $ 105,500 $17,000 $88,500 $105,500