Problems and Final Exam Review
Essay by Nicolas • April 2, 2012 • Exam • 599 Words (3 Pages) • 2,809 Views
A100 Solutions to Chapter 7 problems and Final Exam Review
Chapter 7
Step 7 - Prepare Financial Statements
Bella's Beauty Salon
Income Statement
FYE 12/31
Revenue:
Service fee revenue $ 23,400
Rental fee revenue 3,400
Total revenue $ 26,800
Expenses:
Property tax expense $ 4,350
Wages expense 3,400
Depreciation expense: building 2,220
Insurance expense 1,240
Interest expense 1,000
Shop supplies expense 780
Utilities expense 690
Advertising tax expense 600
Depreciation expense: shop equipment 350
Total expenses _ 14,630
Net income before income tax 12,170
Income tax expense 1,800
Net income $_10,370
Bella's Beauty Salon
Statement of Changes in Retained Earnings
FYE 12/31
Retained earnings, 1/1 $ 24,860
Add:
Net income 10,370
Subtotal 35,230
Deduct:
Dividends 0
________
Retained earnings, 12/31 $___35,230
Bella's Beauty Salon
Balance Sheet
12/31
Assets
Current assets:
Cash $4,200
Rental fee receivable 200
Shop supplies 210
Prepaid insurance 240
Total current assets $ 4,850
Property, Plant and Equipment
Shop equipment $ 3,860
Less: Accumulated depreciation 1,120 $ 2,740
Building 57,500
Less: Accumulated depreciation 6,060 51,440
Land 55,000
Total property, plant and equipment 109,180
Total assets $114,030
Liabilities & Stockholders' Equity
Current liabilities:
Income tax payable $ 1,800
Interest payable 1,000
Unearned rent 800
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