PROBLEM 2 15 POINTS 5 POINTS EACH STATEMENT The following account information as

Question

PROBLEM 2 15 POINTS 5 POINTS EACH STATEMENT The following account information as of December 31, 2006 year-end (prior to closing entries) for Baker is: S 55 Cash Allowance for doubtful Sales Accounts Accounts Payable Salary Exp Equipment Retained earnings Inventory Accounts Receivable Common stock Unearned rent revenue Prepaid Insurance 70 20 47 30 26 14 15 35 15 Accumulated Depreciation 5 Rent expenge Rent expense Cost of Goods Sold Net Invorme PLEASE PREPARE IN PROPERTY FORMAT THE INCOME STATEMENE RETAINED EARNINGS, AND THE BALANCE SHEET PERIOD. OR THE ABoVE Asset licbilt tuam defa dottl_.6 Reped 1‰rante-// IS 47 -3s -6 men

Explanation / Answer

Income Statement As on 31 December 2006 Revenues Sales $ 70 Less: Expenses Cost of goods sold $ 15 Salary expenses $    6 Rent expenses $ 35 Total Expense $ 56 net income $ 14 Statement of Retained earnings Beginning Balance $      47 Add: Net income $      14 Ending balance $      61 Balance Sheet As on 31 December 2006 Assets Liabilities Accounts Receiveble $ 26 Accounts Payable $    55 Allowance for doubtful accounts $ (6) Unearned rent revenue $    14 Accounts Receiveble (Net) $    20 Cash $    55 Stock Holders Equity Prepaid insurance $    15 Common stock $      5 Inventory $    30 Retained earnings $    61 Equipment $ 20 Accumulated depreciation $ (5) Equipment (net) $    15 Total Assets $ 135 Total Liabilities and stockholders equity $ 135

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