Question

The Gold Delivery Company specializes in delivering products from local manufacturers to retail shoes. At the...

The Gold Delivery Company specializes in delivering products from local manufacturers to retail shoes. At the end of November 2003, the company's general ledger carries the following balances (not separates at to debit and credit balances):

  • Accounts Payable - $10,200

  • Account Receivable - $23,000

  • Capital Stock - $25,000

  • Cash - $8,000

  • Delivery Equipment - $22,000

  • Deliver Expenses (gas, oil) - $1,300

  • Delivery Revenues - $12,000

  • Insurance Expenses - $500

  • Loans Payable $10,500

  • Notes Payable - $3,500

  • Office Equipment - $3,700

  • Prepaid Insurance - $2,000

  • Rent Expense - $1,500

  • Retained Earnings (at October 31) - $8,000

  • Wages Expense - $7,200

Construct, in conventional format, both an income statement for the month of November 2003 and a balance sheet at month-end, using the data above. Derive Gold Delivery’s profit for the month, and make sure the balance sheet balances.


Homework Answers

Answer #1

Income Statement:

Income Statement
For the Month Ended November 2003
Delivery Revenues $12,000
Expenses:
Deliver Expenses (gas, oil) $1,300
Insurance Expenses $500
Rent Expense $1,500
Wages Expense $7,200
Total expenses $10,500
Net income $1,500

Balance Sheet:

Balance Sheet
At November 30,2003
Assets Liabilities
Cash $8,000 Accounts Payable $10,200
Account Receivable $23,000 Loans Payable $10,500
Prepaid Insurance $2,000 Notes Payable $3,500
Delivery Equipment $22,000 Total liabilities $24,200
Office Equipment $3,700
Stockholder's equity
Capital Stock $25,000
Retained Earnings [8000+1500] $9,500
Total stockholder's equity $34,500
Total assets $58,700 Total liabilities and stockholder's equity $58,700
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