Question

21. These items are taken from the financial statements of Sam Smith for 2018.                Sam...

21. These items are taken from the financial statements of Sam Smith for 2018.

               Sam Smith, capital 1/1/18          $53,000

               Sam Smith Drawing                             5,000

            Selling expenses                                 10,000

            Equipment                                         65,000

              Accumulated depreciation (equip) 16,000

              Accounts payable                              5,300

            Cash                                                    16,900

               Inventory                                             3,500

            Salaries and wages payable            3,000

            Sales                                                     68,000

            Cost of merchandise sold             20,000

            Administrative expenses                  14,100

            Accounts receivable                        14,000

               Notes payable (due 12/31/20)         3,200

           

           

           

Instructions:

Prepare a multiple step income statement and a statement of owner’s equity for the year ended December 31, 2018 and a classified balance sheet as of December 31, 2018.

                                                                  Sam Smith, CPA

                                                                Income Statement

                                                         For the period ending 12/31/18

                                                                  Sam Smith, CPA

                                                      Statement of Owners Equity

                                                      For the period ending 12/31/18
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Homework Answers

Answer #1
Sam Smith, CPA
Income Statement
For the period ending 12/31/18
Sales $   68,000
Less: Cost of merchandise sold $   20,000
Gross profit $   48,000
Less: Operating expenses
Selling expense $   10,000
Administrative expenses $   14,100
Total operating expense $   24,100
Net Operating income $   23,900
Sam Smith, CPA
Statement of Owner's Equity
For the period ending 12/31/18
Sam Smith, Capital - Beginning balance $   53,000
Add: Net income $   23,900
$   76,900
Less: Withdrawals $   (5,000)
Sam Smith, Capital - Ending balance $   71,900

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