Exercise 4-6 Crane Company, a ski tuning and repair shop, opened on November 1,
ID: 2342938 • Letter: E
Question
Exercise 4-6 Crane Company, a ski tuning and repair shop, opened on November 1, 2016. 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, 2017 Cash Cash Receipts Payments Issuance of common shares Payment to purchase repair shop equipment Payments to landlord $20,000 $9,480 1,190 360 980 2,000 10,100 Newspaper advertising payment Uility bill payments Part-time helper's wage payments Income tax payment Cash receipts from ski and snowboard repair services 31,400 Subtotals Cash balance 51,400 24,110 27,290 $51,400 $51,400 Totals The repair shop equipment was purchased on November 1 and has an estimated useful Ife of 5 years. Lease payments to the landlord are made at the beginning of each month. The payments to the andlord included a security deposit of $170. The part-time helper is owed $405 at April 30, 2017, for unpaid wages. At April 30, 2017, customers owe Crane Company $440 for services they have received but have not yet paid forExplanation / Answer
Solution:
Crane company Balance sheet as on april 30,2017
Working notes:
Depreciation on equipment = $9,480 * 6/60 = $948
Income statement
Assets Current assets: Cash 27,290 Security deposit 170 Accounts receivable 440 Total current assets: 27,900 Property, plant and equipment , Equipment 9,480 Less: Accumulated depreciation 948 8,532 Total property, plant and equipment: Total assets 36,432 Liabilities and stockholders equity Current liabilities: Wages payable 405 Stockholder's equity: Common stock 20,000 Retained earnings 16,027 Total stockholder's equity 36,027 Total liabilities and stockholder's equity 36,432Related Questions
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