Question

Your friend James Smith, knowing that you are a ‘top gun’ accounting student, has asked you to prepare a balance sheet and a statement of comprehensive income from the following information.

Items	Amount ($)
Salaries expense	1236
Cash sales	132000
Insurance expense	932
Cost of supplies used to make cash sales	32400
Equipment	3200
Electricity and telephone expense	9560
Accounts payable	14020
Bank overdraft	2300
Wages expense	38900
Land and buildings	125000
Vehicles	23230
Mortgage on land	23000
Tax payable	5000
Shareholder’s equity	58138

Required

Prepare an Income Statement and balance sheet.

Answer 1

Income Statement

Particulars	Amount ($)
Cash Sales	132000
Other Income	0
Total Income	132000
Salaries Expenses	1236
Insurance Expenses	932
Cost of Supplies	32400
Equipments	3200
Electricity & Telephone Expenses Wages Expenses	9560 38900
Total Expenses	86228
Comprehensive Income	45772

Balance Sheet

Equity and Liability
Shareholder's Equity Includes comprehensive Income	103910
Accounts Payable	14020
Bank Overdraft	2300
Tax Payable	5000
Assets
Land and Building	125000
Vehicle	23230
Mortgage on Land	23000