Question

2. Using the following below, build the balance sheet and income statement for this merchandize business.

Cash - $10,000	Accounts Receivable - $80,000
Sales Discounts - $4,000	Sales Expense - $5,500
Owner’s Equity - $ 58,000	Gross Profit - $56,000
Accounts Payable - $30,500	Unearned Rent – $3,500
Equipments - $ 25,000	Interest Expense – $1,000
Cost of Goods Sold - $78,000	Administrative Expenses - $4,000
Wages Payable - $8,000	Accumulated Depreciation, Equipments - $15,000
Interest Revenue - $1,500	Sales – $138,000

Answer 1

Income Statement
Revenues
Sales revenue	138,000
Less:
Sales discount	-4,000
Net Sales		134,000
Cost of goods sold		-78,000
Gross profit		56,000
Operating expenses:
Sales expense	-5,500
Administrative expense	-4,000
Total Operating expenses		-9,500
Operating Profit		46,500
Other income
Interest revenue	1,500
Other expenses
Interest expense	-1,000
		500
Net Income		$47,000

Balance Sheet
Assets		Amount
Current Assets:
Cash	10,000
Accounts receivable	80,000
Total Current Assets		90,000
Plant,Assets :
Equipment	25,000
Less:Accumulated Depreciation- equipment	-15,000
Total plant asset		10,000
Total Assets		100,000
Liabilities and Owners Equity
Current Liabilities:
Accounts payable	30,500
Unearned rent	3,500
Wages payable	8,000
Total Current liabilities		42,000
Owners Equity:
Owners equity	58,000
Total stockholders equity		58,000
Total Liabilities & Owners Equity		100,000

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