Complete an Income Statement, Statement of Owner's Equity, and Balance Sheet using the information provided below for Rya’s Planning Services.
Cash… …… ……… … … … ………$21,500
Accounts Receivable………17,500
Office Supplies…… … ………500
Equipment…… …… … …… …15,000
Accounts Payable… …… ……9,750
Rya Page, Capital… …………28,200
Rya Page, Drawing………………5,000
Planning Fees Income………26,250
Office Supplies Expense……200
Rent Expense…… ……… … ………800
Salaries Expense…… … ………3,000
Utilities Expense………… ……700
I don't understand where the Equipment should be..I believe that it goes to the Balance Sheet only as an Asset in this case.Oh,it's so complicated..
Thanks for any help or suggestion!
ok,I got it by myself :)
To complete the Income Statement, Statement of Owner's Equity, and Balance Sheet for Rya's Planning Services, we will categorize the provided information into the relevant sections of each financial statement.
1. Income Statement:
The Income Statement shows the company's revenues and expenses during a specific period. It helps determine the net income or loss of the business.
a) Revenues:
- Planning Fees Income: $26,250
b) Expenses:
- Office Supplies Expense: $200
- Rent Expense: $800
- Salaries Expense: $3,000
- Utilities Expense: $700
To calculate the net income, we subtract the total expenses from the total revenues:
Total Revenues - Total Expenses = Net Income
$26,250 - ($200 + $800 + $3,000 + $700) = Net Income
2. Statement of Owner's Equity:
The Statement of Owner's Equity shows the changes in the owner's capital account during a specific period.
a) Beginning Capital:
- Rya Page, Capital: $28,200
b) Drawings:
- Rya Page, Drawing: $5,000
c) Net Income:
We calculated the net income in the Income Statement. Let's assume it is $X.
d) Ending Capital:
To calculate the ending capital, we add the beginning capital, net income, and subtract the drawings:
Beginning Capital + Net Income - Drawings = Ending Capital
$28,200 + $X - $5,000 = Ending Capital
3. Balance Sheet:
The Balance Sheet shows the company's assets, liabilities, and owner's equity at a specific point in time.
a) Assets:
- Cash: $21,500
- Accounts Receivable: $17,500
- Office Supplies: $500
- Equipment: $15,000 (as you correctly mentioned, equipment is classified as an asset)
b) Liabilities:
- Accounts Payable: $9,750
c) Owner's Equity (ending capital from the Statement of Owner's Equity):
- Rya Page, Capital (Ending Capital): $Ending Capital (from the Statement of Owner's Equity)
Now, based on the information provided, you can organize the Income Statement, Statement of Owner's Equity, and Balance Sheet accordingly.