The amounts of the assets and liabilities of Nordic Travel Agency at December 31, 2019, the end of the year, and its revenue and expenses for the year follow. The capital of Ian Eisele, owner, was $670,000 on January 1, 2019, the beginning of the year. During the year, Ian withdrew $42,000.
Accounts payable $ 69,500
Rent expense $ 36,000
Accounts receivable 285,000
Supplies 5,500
Cash 190,500
Supplies expense 4,100
Fees earned 912,500
Utilities expense 28,500
Land 544,000
Wages expense 510,000
Miscellaneous expense 6,400
Instructions
1. Prepare an income statement for the year ended December 31, 2019.
2. Prepare a statement of owner’s equity for the year ended December 31, 2019.
3. Prepare a balance sheet as of December 31, 2019.
4. What item appears on both the statement of owner’s equity and the balance sheet?
Answer:
1.
Fees earned$912,500
Expenses:
Wages expense$510,000
Rent expense36,000
Utilities expense28,500
Supplies expense4,100
Miscellaneous expense6,400
Total expenses585,000
Net income$327,500
2.
Ian Eisele, capital, January 1, 2019$670,000
Net income for the year$327,500
Withdrawals(42,000)
Increase in owner’s equity285,500
Ian Eisele, capital, December 31, 2019$955,500
3.
Cash$ 190,500
Accounts receivable285,000
Supplies5,500
Land544,000
Total assets$1,025,000
Accounts payable$ 69,500
Ian Eisele, capital955,500
Total liabilities and owner’s equity$1,025,000
4. Ian Eisele, Capital of $955,500