These items are taken from the financial statements of Mueller, Inc. Prepaid ins
ID: 2445282 • Letter: T
Question
These items are taken from the financial statements of Mueller, Inc.
Prepaid insurance ........... $ 2,400
Equipment............. 30,000
Salaries and wages expense....... 34,000
Utilities expense.................. 2,100
Accumulated depreciation - equipment.... 7,600
Accounts payable............ 7,200
Cash................. 6,100
Accounts receivable.......... 2,900
Salaries and wages payable....... 3,000
Common stock............ 6,000
Depreciation expense.......... 4,300
Retained earnings (beginning)...... 14,000
Dividends............. 2,600
Service revenue........... 51,000
Maintenance and repairs expense..... 2,600
Insurance expense.......... 1,800
Instructions: Prepare an income statement, a retained earnings statement, and a classified balance sheet as of December 31, 2014.
Explanation / Answer
Mueller,Inc
Income statement for the year ending December 31, 2014.
Service Revenue $ 51000
less :-
Salaries and wage expense $34,000
Depreciation expense $ 4,300
Maintenance and Repair expense $ 2,600
Insurance expense $ 1,800
Utilities $2,100
---------------- $ 44,800
--------------
Operating Income $ 6,200
less : Dividend $ 2,600
----------------
Balance taken to Retained earnings $ 3,600
----------------
Mueller Inc
Retained Earnings statement
Retained earnings in the beginning $ 14,000
Add :- transferred from Income statement $ 3,600
---------------
Total Retaine earnings as at December 31,2014 $ 17,600
------------------
Mueller Inc
Balance Sheet as of December 31,2014
Liabilities $ $ Assets $ $
Common stock 6,000 Fixed Asset
Equipment 30,000
Retained Earnings 17,600 less : accumulated depreciation 7,600
Current liabilities Net Fixed Asset ----------- 22,400
Accounts payable 7,200
Salaries and wages payable 3,000 Current Assets
----------- 10,200 Cash 6,100
Accounts receivable 2,900
Prepaid Insurance 2,400
------------ 11,400 -------------------- ---------------
TOTAL 33,800 33,800
------------------- -----------------
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