Question

Michael Don owns an equipment hire business under the name Safety Hire. Financial data for Safety Hire as of 30 June 2019 are shown as below:.

Account	Balance ($)
Accounts receivable	73,000
Wages expense	78,000
Equipment hire income	200,000
Advertising expense	32,000
Rent revenue	9,000
Prepaid insurance	9,000
Accounts payable	88,000
Insurance expense	7,000
Cash at bank	48,000
Equipment	190,000
Michael Don, capital	?

Required:

a) Prepare an income statement for the business for the year ending 30 June 2019.
b) Prepare a balance sheet in narrative format for Safety Hire as at 30 June 2019.
c) Prepare a statement of changes in Equity for the year and determine Michael Don’s capital at 30 June 2018?

You may wish to copy/paste the following template for your answer.  

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Answer 1

*Any doubt please comment

Safety Hire
Income Statement
For the year ended 30 June 2019
Revenues
Equipment hire income	200000
Rent revenue	9000
Total revenue		209000
Expenses
Wages expense	78000
Advertising expense	32000
Insurance expense	7000
Total expenses		117000
Net Income		92000

Safety Hire
Balance Sheet
As at June 30, 2019
Assets
Cash at bank	48000
Accounts receivable	73000
Prepaid Insurance	9000
Equipment	190000
Total assets	320000
Liabilities and Owners Equity
Liabilities
Accounts Payable	88000
Total liabilities	88000
Owners equity
Michael Don, Capital	232000
Total liabilities and owners equity	320000

Statement of changes in equity
	Common Stock
Balances, June 30, 2018 [232000-92000]	140000
Net Income	92000
Balances, June 30, 2019	232000