Hi.
I never posted my work yet. Sorry. Here is the question then my answer which I cannot solve!! I cant balance out the balance sheet.... I have spent 2 days on this... Please help:
Prepare a Trial Balance, an Income Statement and a Balance Sheet.
Doris' Custom Designs
Jan. 1 Doris deposits $10,000 in the bank to start her business.
(Hint: use "misc. credit" column.)
Jan. 2 Doris pays $800 for rent for January. (Cheque #100)
Jan. 6 Doris pays $1,200 to a local newspaper for an "advertorial". (Cheque #101)
Jan. 6 Doris receives $2,200 cash for her first design consultation.
Jan. 10 Doris pays $600 to a part-time secretary. (Cheque #102)
Jan. 11 Doris purchases office supplies for $160. (Cheque #103)
Jan. 15 Doris receives $1,200 cash for another design consulting job.
Jan. 20 Doris purchases new computer equipment for $3,600. (Cheque #104)
Jan. 24 Doris pays $400 to produce flyers promoting her business. She uses cheque #105.
Jan. 30 Doris receives her telephone bill for January for $180. She pays it with cheque #106.
Jan. 30 Doris pays $160 to the hydro company for her office, using cheque #107.
Jan. 31 Doris receives $3,800 for a large consulting job that she has just completed.
Doris' Custom Designs
Income Statement
For the Month Ended January 31, 2005
Sale Revenue $7,200
Cost of Sales 0
Gross Profit 7,200
Expenses
Rent Expense $800
Utilities Expense 340
Salaries & Wages Expense 600
Advertising Expense 1,600
Supplies Expense 160
Equipment Purchase 3,600
Total Expenses $7,100
Net Income $100
Balance Sheet
Doris' Custom Designs
December 31, 2010
Assets
Current Assets
Cash $10,100
Supplies On Hand 160
Total Current Assets $10,260
Fixed Assets
Equipment, at cost $3,600
Total Fixed Assets $3,600
Total Assets $13,860
Liabilities and Owner's Equity
Current Liabilities
Salaries & Wages Payable 0
Total Current Liabilities $0
Long Term Liabilities
Bank Loan 0
Total Liabilites $0
Owner's Equity
A. Smith, Capital, December 31, 1998 $10,000
Add: Net Income 100
- 10,100
Less: Withdrawals 0
Balance, December 31, 2010 $10,100
Total Liabilities and Owner's Equity $10,100
To prepare the Trial Balance, Income Statement, and Balance Sheet for Doris' Custom Designs, you need to follow these steps:
1. Trial Balance:
A trial balance is a list of all the accounts with their balances to ensure that debits equal credits. The trial balance should have two columns; debit and credit. Start by identifying the accounts and their balances given in the question. For example:
- Cash: $10,100 (debit)
- Supplies on Hand: $160 (debit)
- Rent Expense: $800 (debit)
- Utilities Expense: $340 (debit)
- Salaries & Wages Expense: $600 (debit)
- Advertising Expense: $1,600 (debit)
- Supplies Expense: $160 (debit)
- Equipment Purchase: $3,600 (debit)
- Sale Revenue: $7,200 (credit)
Add up all the debit balances and credit balances separately. The total debits and credits should be equal in a trial balance. If they are not equal, check for any errors in recording or calculations.
2. Income Statement:
An income statement shows the revenues, expenses, and net income (or net loss) for a specific period. From the given information, you already have the revenue and expense amounts. Calculate the net income by subtracting the total expenses from the total revenue. In this case, the net income is $100.
3. Balance Sheet:
A balance sheet shows the financial position of a business at a specific point in time. It consists of assets, liabilities, and owner's equity.
- Assets: In the given information, the only asset is cash ($10,100) and supplies on hand ($160). Total current assets would be $10,260. The fixed asset is equipment ($3,600). Total assets would be $13,860.
- Liabilities: There are no current liabilities or long-term liabilities mentioned in the given information. Therefore, the total liabilities would be $0.
- Owner's Equity: The owner's equity includes the capital and net income/loss. In this case, the owner's equity is represented by "A. Smith, Capital, December 31, 1998" ($10,000) plus the net income ($100), which gives a total owner's equity of $10,100.
Make sure that the total assets equal the total liabilities and owner's equity in a balance sheet.
Please note that the above steps are general guidelines to solve the problem. If there are specific requirements or additional information provided, you may need to adjust the calculations accordingly.