Week 1 Homework

Exercise E1-4

Income Statement

Alexis Co.
Income Statement
For the Year Ending December 31, 2012

Revenue Service Revenue $58,000
Expenses
Salary and wages $30,000 Rent expense 10,400 Utilities expense 2,400 Advertising expenses 1,800 Total Expenses 44,600
Net Income $13,400

Retained Earnings Statement

Alexis Co.
Retained Earnings Statement
For the Year Ending December 31, 2012

Retained earnings, January 1, 2012 $ 67,000
Add: Net income 13,400 80,400
Less: Dividends 6,000
Retained earnings December 31, 2012 $ 74,400

Exercise E2-5
Classified Balance Sheet
Victory Co

Balance Sheet

December 31, 2012

Assets
Current assets Cash $11,840 Accounts receivable 12,600 Prepaid Insurance 3,200 Service revenue 14,700 Total current assets $42,340
Property Plant and equipment Land 61,200 Less: Depreciation expense 2,600 58,600 Equipment $ 82,400 Less: Accumulated depreciation equipment 18,720 63,680 Buildings 105,800 Less: Accumulated depreciation buildings 45,600 60,200 182,480

Total assets $224,820

Liabilities and Stockholders’ Equity

Current Liabilities Note payable $13,600 Insurance expense 780 Interest expense 2,600 Accounts payable 9,500 Interest payable 3,600 Total Current Liabilities $16,480
Long-term Liabilities Notes payable 93,600 Total Long-term Liabilities 93,600
Stockholder’s equity Common stock 60,000 Retained earnings 40,000 Total stockholder’s equity 100,000 Total liabilities and stockholders’ equity