Prepare an income statement in its proper format

Assignment Help Accounting Basics

Reference no: EM13762801

Problem 1: Ramsey Corporation reported the following accounts and balances in its financial statements:

Cash	$35,000
Inventory	510,200
Equipment	519,500
Accounts payable	516,350
Contributed capital	530,000
Retained earnings	518,350

Arrange the accounts and balances into the accounting equation using the following equation and then answer the following questions: Assets = liabilities + owners' equity

1. What is the total amount of assets?

2. What is the total amount of liabilities?

3. What is the total amount of owners' equity?

Problem 2: After sk months of operations, Right Way Lumber had the following revenues and expense balances:

Supplies expense	$11,000
Service revenue	862,090
Utilities expense	86,200
Rent expense	814,700
Wages expense	813,330

Prepare an income statement in its proper format ending on June 30, 2009. You should include the heading and left align it so the formatting is understandable.

Problem 3: Jim Smith had trouble finding a job, so he decided to start his own sole proprietorship by the name of Designers Inc. Jim is a Web site designer, and here are the results as of the end of the first year of his business.

Accounts payable	512,100
Cash	519,150
Service revenue	520,000
Contributed capital	521,000
Wages expense	4,100
Inventory	4,445
Rent expense	5,000
Equipment	516,325
Supplies expense	54,080
Retained earnings	56,820

Prepare a balance sheet in its proper format with the heading left aligned.

Problem 4: Utopia Dance Clubs, Inc., rented an old warehouse for its newest club on October 1, 2010. To receive a discount, Utopia paid $11,700 for 18 months of rent in advance. Assume no additional rent is paid in 2011 and 2012 and answer the following questions:

a. How much rent expense will be recognized for the year ended December 31, 2010?

b. What will be the balance in the prepaid rent account at December 31, 2010?

c. How much rent expense will be recognized for the year ended December 31, 2011?

d. What will be the balance in the prepaid rent account at December 31, 2011?

e. How much rent expense will be recognized for the year ended December 31, 2012?

f. What will be the balance in the prepaid rent account at December 31, 2012?

Reference no: EM13762801

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