Question

Use the following information available as of December 31 to prepare an income statement for the year and a balance sheet for Goldie Company.

Fees for services performed during the year, $123,000
Accounts payable, $17,800
Accounts receivable, $17,400
Miscellaneous expenses for the year, $9,000
Supplies on hand, $3,300
Notes payable, $25,000
Interest expense on the note for the year, $3,700
Equipment, $92,700
Cash on hand, $11,600
Salaries expense for the year, $71,500
Supplies expense for the year, $8,500
Rent expense for the year, $11,100
Common stock that has been issued, $55,000
Retained earnings at the end of the year, $27,200

Answer 1

Goldie Company

a) Income Statement for the year ended December 31:

Fees for services $123,000

Miscellaneous expenses 9,000

Interest expense 3,700

Salaries expense 71,500

Supplies expense 8,500

Rent expense 11,100 $103,800

Net income 19,200

b) Balance Sheet as of December 31:

Assets:

Cash on hand $11,600

Accounts receivable 17,400

Supplies on hand 3,300

Equipment 92,700

Total assets $125,000

Liabilities and Equity:

Accounts payable $17,800

Notes payable 25,000

Common stock 55,000

Retained earnings 27,200

Total liabilities & equity $125,000

Step-by-step explanation:

a) Data and Calculations:

Trial balance as of December 31:

Account Titles Debit Credit

Cash on hand $11,600

Accounts receivable 17,400

Supplies on hand 3,300

Equipment 92,700

Accounts payable $17,800

Notes payable 25,000

Common stock 55,000

Retained earnings 8,000

Fees for services 123,000

Miscellaneous expenses 9,000

Interest expense 3,700

Salaries expense 71,500

Supplies expense 8,500

Rent expense 11,100

Totals $228,800 $228,800

Retained Earnings at January 1 = $8,000 (27,200 - 19,200)

Net income 19,200

Retained Earnings at December 31 $27,200