Answer:
Income Statment:
Trucking fees earned 130,000
Depreciation expense—Trucks (23,500)
Salaries expense (61,000)
Office supplies expense (8,000)
Repairs expense—Trucks (12,000)
Net Income 25,500
Retained Earnings
Beginning 155,000
Net Income 25,500
Dividends (20,000)
Ending 160,500
Balance Sheet:
Cash 8,000 Accounts payable 12,000
Accounts receivable 17,500 Interest payable 4,000
Office supplies 3,000 Total current liabilities 16,000
Total Current Assets: 28,500 Long-term 53,000
Trucks (net) 136,000 Total liabilities 69,000
Land 85,000 Common Stock 20,000
Total non-current 221,000 Retained Earnings 160,500
Total Equity 180,500
Total Assets 249,500 Liabilities + Equity 249,500
Explanation:
For the income statement we list the revenue and then, we subtract all the expenses account.
Retained Earnings will be beginning + income - dividends. This value will go into the balance sheet.
For the balance sheet, we display assets into both categories:
current: who are going to be converted into cash within a year.
and non-current like the truck and the land which are going to be in the company's book for more than a year before converting into cash.
Liabilities and equity will be in the other side and their sum should match the total assets.
