Please help solve and explain. Thanks. The following information is available fo
ID: 2336142 • Letter: P
Question
Please help solve and explain. Thanks.
The following information is available for two different types of businesses for the 2018 accounting year. Hopkins CPAs is a service business that provides accounting services to small businesses. Sports Clothing is a merchandising business that sells sports clothing to college students. Data for Hopkins CPAs 1. Borrowed $44.000 from the bank to start the business. 2. Provided $34,000 of services to clients and collected $34,000 cash. 3. Paid salary expense of $21,800. Date for Sports Clothing 1. Borrowed $44,000 from the bank to start the business. 2. Purchased $23,000 inventory for cash. 3. Inventory costing $19,300 was sold for $35,000 cash. 4. Paid $2,800 cash for operating expenses. Required a. Prepare an income statement, balance sheet, and statement of cash flows for each of the companies.Explanation / Answer
Answers
Income Statement
Service Revenue
$ 34,000.00
Expenses:
Salary Expenses
$ 21,800.00
Net Income
$ 12,200.00
Balance Sheet
Assets
Cash
$ 56,200.00
Total Assets
$ 56,200.00
Liabilities
Bank Loan
$ 44,000.00
Owner's Equity
Capital Balance
$ 12,200.00
Total Liabilities & equity
$ 56,200.00
Statement of Cash Flows
Cash Flows from Operating Activities
Cash received for servcies
$ 34,000.00
Cash paid for expenses
$ (21,800.00)
Net Cash flows from Operating activities
$ 12,200.00
Cash flows from Investing activities
$ -
Cash flows from financing activities
Cash borrowed from bank
$ 44,000.00
Net Increase (Decrease) in Cash
$ 56,200.00
Cash at beginning
$ -
Cash at the end
$ 56,200.00
Income Statement
Sales Revenue
$ 35,000.00
Cost of Goods Sold
$ 19,300.00
Gross Profits
$ 15,700.00
Operating Expenses
$ 2,800.00
Net Income
$ 12,900.00
Balance Sheet
Assets
Cash
$ 53,200.00
Inventory
$ 3,700.00
Total Assets
$ 56,900.00
Liabilities
Bank Loan
$ 44,000.00
Owner's Equity
Capital Balance
$ 12,900.00
Total Liabilities & equity
$ 56,900.00
Statement of Cash Flows
Cash Flows from Operating Activities
Cash received from sales
$ 35,000.00
Cash paid for purchases
$ (23,000.00)
Cash paid for expenses
$ (2,800.00)
Net Cash flows from Operating activities
$ 9,200.00
Cash flows from Investing activities
$ -
Cash flows from financing activities
Cash borrowed from bank
$ 44,000.00
Net Increase (Decrease) in Cash
$ 53,200.00
Cash at beginning
$ -
Cash at the end
$ 53,200.00
Income Statement
Service Revenue
$ 34,000.00
Expenses:
Salary Expenses
$ 21,800.00
Net Income
$ 12,200.00
Balance Sheet
Assets
Cash
$ 56,200.00
Total Assets
$ 56,200.00
Liabilities
Bank Loan
$ 44,000.00
Owner's Equity
Capital Balance
$ 12,200.00
Total Liabilities & equity
$ 56,200.00
Statement of Cash Flows
Cash Flows from Operating Activities
Cash received for servcies
$ 34,000.00
Cash paid for expenses
$ (21,800.00)
Net Cash flows from Operating activities
$ 12,200.00
Cash flows from Investing activities
$ -
Cash flows from financing activities
Cash borrowed from bank
$ 44,000.00
Net Increase (Decrease) in Cash
$ 56,200.00
Cash at beginning
$ -
Cash at the end
$ 56,200.00
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