Reference no: EM132459706

Background Information: Donald Duck and Friends began operations on January 1, 2017

The following events occurred during the year

1 Provided lawn services on account for $90,000

2 Collected $82,000 cash from accounts receivable

3 Paid salaries to Mickey for the year of $30,000

4 Company estimates 2% of the on account revenue to be uncollectible based on percent of revenue method.

Problem a) Complete the accounting equation for the different transactions.

1. Donald and Friends Company
2. Accounting Equation
3. Event Assets Equity

Cash + Accounts Receivable - Allowance = Retained Earnings

1 $90,000 $90,000

2 $82,000 $(82,000)

3 $(30,000) $(30,000)

4 $6,200 $(6,200)

Total $52,000 + $8,000 - $6,200 = $53,800

Problem b) Prepare an income statement for 2017

                                                            Donald Duck and Friends                                 Income Statement

For the Year Ended December 31,2017              Operating Expense                                    Net Income $-

Problem C) Prepare a year-end balance Sheet

                                                                Donald Duck and Friends                                 Balance Sheet

As of December 31,2017                                       Assets                                               Total Assets $-

                                                                         Liabilities                                       Stockholders Equity

                                                            Total Stockholders Equity                  Total Liabilities and Stockholders Equity