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8 March, 14:25

Betty Smith is the owner of the Accurate Tax Service. For the year ended 12/31/17 the following information is available for this service business: Cash, $62,500; Accounts receivable, $3,700; Office Furniture & Fixtures, $11,300; Office Machines & Computers, $15,000; Automobile, $9,500; Accounts Payable, $1,700; Betty Smith Capital, $32,000; Owner draw,$18,600; Revenue from tax preparation, $71,300; Revenue from monthly clients, $43,800; Salaries expense, $12,500; Advertising expense, $900; Rent expense, $6,000; Automobile expense, $1,300; General office expenses, $7,500. Prepare an income statement and balance sheet for the year ended 12/31/17.

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  1. 8 March, 18:16
    0
    Profit=86900

    Total Assets=102000

    Liabilities=1700

    Total equity=100300

    Explanation:

    Betty Smith

    Accurate tax service

    income statement

    For the period 12-31-2017

    $

    Revenue from tax preparation=71300

    Revenue from monthly clients=43800

    Total service revenue ⇒ = 115100

    less: Operating expense

    Salaries = 12500

    Advertising expense=900

    Rent expense=6000

    Automobile expense=1300

    General office expense=7500

    Total operating expense ⇒ = (28200)

    Profit 86900

    Betty Smith

    Accurate tax service

    Balance sheet

    For the year ended 12-31-2017

    Total Assets:

    Cash=62500

    Account receiable=3700

    Office furniture=11300

    office machine and computer=15000

    Automobile=9500

    Total Assets=102000

    Liabilities:

    Account payable=1700

    Owners Equity:

    Betty smith capital=32000-drawing=32000-18600=13400

    Retained earning=86900

    Total equity=100300

    As we know that profit and loss account closes in retained earning account and Assets = liabilities + equity
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