Once you have your adjusted trial balance, you can move the totals to the Income
ID: 2473060 • Letter: O
Question
Once you have your adjusted trial balance, you can move the totals to the Income Statement columns for all revenue and expense accounts and to the Balance Sheet and owners’ equity columns for all asset, liability, and equity accounts. When you total the columns for the income statement, it will not balance. The difference is your net income. Be sure to review the worksheet in Chapter 4 to see how it presents the net income and make the two columns balance. The same will happen when you total the Balance Sheet columns. Now you can prepare the income statement and the statement of owner's equity for the year ended April 30, 2009 and the classified balance sheet at April 30, 2009. Please be sure to prepare these in Excel as it is difficult to keep your columns straight and get your formatting correct in Word. Proper format counts. Please view examples in your textbook and make sure you prepare a classified balance sheet. Be careful how many $ you use in your statements. They go before the first amount in each column and on the totals. Also make sure you underline before a calculation (example addition) and double underline at the end of the statement to show the end.
Explanation / Answer
Brawn Demolition Company
Income Statement
For the period ending April 30, 2009
Expenses
Amount
Income
Amount
Wages expenses
49,500
Demolition fee earned
140,000
Interest expenses
3,000
Insurance expenses
4,095
Rent Expenses
16,800
Supplies expenses
6,080
Property tax expenses
4,900
Repair expenses
2,100
Utilities expenses
3,580
Depreciation expenses - equipment
11,000
Excess of income over expenditure
38,945
Total
140,000
Total
140,000
Brawn Demolition Company
Balance sheet
As on April 30, 2009
Assets
Cash
17,000
Supplies
3,420
Prepaid insurance
2,405
Equipment
140,460
Less: Accumulated depreciation
(33,000)
107,460
Total Assets
130,285
Owner's Capital and Liabilities
Liabilities;
Accounts Payable
6,580
Interest payable
250
Rent payable
1,400
Wages payable
1,500
Property tax payable
500
Long-term notes payable
25,000
Total Liabilities
35,230
Owner's Capital
J. Brown Capital
81,610
J. Brown Withdrawals
(25,500)
56,110
Net Income
38,945
Total
130,285
Brawn Demolition Company
Income Statement
For the period ending April 30, 2009
Expenses
Amount
Income
Amount
Wages expenses
49,500
Demolition fee earned
140,000
Interest expenses
3,000
Insurance expenses
4,095
Rent Expenses
16,800
Supplies expenses
6,080
Property tax expenses
4,900
Repair expenses
2,100
Utilities expenses
3,580
Depreciation expenses - equipment
11,000
Excess of income over expenditure
38,945
Total
140,000
Total
140,000
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