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Horeb Company, a ski tuning and repair shop, opened in November 2011. The company carefully kept track of all its cash receipts and cash payments. The following information is available at the end of the ski season, April 30, 2012.
You learn that the repair equipment has an estimated useful life of 4 years. The company rents space at a cost of $175 per month on a one-year lease. The lease contract requires payment of the first and last months' rent in advance, which was done. The part-time helper is owed $420 at April 30, 2012, for unpaid wages. At April 30, 2012, customers owe Mt. Horeb Company $420 for services they have received but have not yet paid for.
Instructions
(a) Prepare an accrual-basis income statement for the 6 months ended April 30, 2012.
(b) Prepare the April 30, 2012, classified balance sheet.
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