The amounts of the assets and liabilities of Wilderness Travel Service at April 30, 2019, the end of the year, and its revenue and expenses for the year follow. The capital of Harper Borg, owner, was $180,000 at May 1, 2018, the beginning of the year, and the owner withdrew $40,000 during the year.
Accounts payable $ 25,000
Supplies $ 9,000
Accounts receivable 210,000
Supplies expense 12,000
Cash 146,000
Taxes expense 10,000
Fees earned 875,000
Utilities expense 38,000
Miscellaneous expense 15,000
Wages expense 525,000
Rent expense 75,000
Instructions
1. Prepare an income statement for the year ended April 30, 2019.
2. Prepare a statement of owner’s equity for the year ended April 30, 2019.
3. Prepare a balance sheet as of April 30, 2019.
4. What item appears on both the income statement and statement of owner’s equity?
Answer:
1.
Fees earned$875,000
Expenses:
Wages expense$525,000
Rent expense75,000
Utilities expense38,000
Supplies expense12,000
Taxes expense10,000
Miscellaneous expense15,000
Total expenses675,000
Net income$200,000
2.
Harper Borg, capital, May 1, 2018$180,000
Net income for the year$200,000
Withdrawals(40,000)
Increase in owner’s equity160,000
Harper Borg, capital, April 30, 2019$340,000
3.
Cash$146,000
Accounts receivable210,000
Supplies9,000
Total assets$365,000
Accounts payable$ 25,000
Harper Borg, capital340,000
Total liabilities and owner’s equity$365,000
4. Net income of $200,000
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