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FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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
Transcribed Image Text:Question 2:
Part i: The following balances are taken from the books of George Anderson at the end of his
first year trading on 31 December 2014.
Debit
Credit
%24
Sales
40000
Purchases
18500
Wages and salaries
5100
Repairs and maintenance
1300
Heating and lighting
900
General expenses
1200
Insurance
800
Cash at bank
2200
Cash in hand
1300
Trade receivables
4100
Trade payables
3400
Premises
30000
Fixtures and fttings
10000
Motor vehicle
8000
Capital at 1 January 2014
52000
Drawings
12000
95400
95400 The
following additional information is available:
Inventory at 31 December 2014 was valued at $4500.
Required:
(a) Prepare income statement for the year ended 31 December 2014.
(b) Prepare a balance sheet as at 31 December 2014.
Part ii:
The income statement is a mandatory statement that must be prepared and disclosed for the
investors, owners, government and tax authorities. The objective of preparing the income
statement is to calculate the net profit or loss.
Consider the following income statement data from the Ross Company:
| 2016
| $550,000
336,000
105,000
60,000
2015
$450,000
279,000
99,000
50,000
5,400
Sales revenue
Cost of goods sold
Selling expenses
Administrative expenses
Income tax expense
Required:
Prepare a comparative income statement, showing increases and decreases in dollars and in
percentages.
7,800

Transcribed Image Text:Part iii:
Walter incorporation had the following transactions during the month of March 2018. Prepare an
income statement based on this information being careful to include only those items that should
appear in that financial statement.
1. Cash received from bank loans was $10,000
2. Revenues earned and received in cash were $8,500
3. The owner waters withdrew $4,000 in cash
4. The expenses incurred and paid were$ 5,000.
Part iv:
An inexperienced accountant for Fowler Company prepared the following income statement for
the month of august 2018
FOWLER COMPANY
Income Statement
For the Year Ended December 31, 2018
Revenues
Services provided to customers
investment by Q Fowler owner
$ 10,000.00
$ 5,000.00
loan from bank
1,400.00
Total Revenues:
$ 16,400.00
Expenses
payment to long term creditors
expenses required to provide services to customer
purchase of land
Total Expenses:
8000
7500
16000
Net Loss
31,500.00
$(15,100.00)
Required:
Prepare a revise income statement in accordance with generally accepted accounting principles.
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