Financial Accounting, Student Value Edition (5th Edition)
5th Edition
ISBN: 9780134728520
Author: Robert Kemp, Jeffrey Waybright
Publisher: PEARSON
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Textbook Question
Chapter 1, Problem 33AP
A Preparing the income statement, statement of
Resto Motors, Inc., restores antique automobiles. The retained earnings balance of the corporation was $22,400 at December 31, 2017. During 2018, the corporation paid $85,000 in dividends to its stockholders. At December 31,2018. the business s accounting records show these balances:
| $ 30,000 | Cash............................................. | $36,000 | |
| Notes Payable........................... | 15,000 | Accounts Payable.......................... | 19,000 |
| Retained Earnings.................... | ? | Advertising Expense.................... | 1,100 |
| Salaries Expense....................... | 33,400 | Service Revenue............................ | 50,000 |
| Equipment............................... | 57,000 | Common Stock............................ | 2,500 |
| Insurance Expense.................... | 3,300 | Rent Expense................................ | 2,200 |
| Utilities Expense........................ | 2,950 | Supplies....................................... | 40,000 |
Requirements
- 1. Identify each amount shown as an asset, liability, or
stockholders' equity - 2. Prepare the following financial statements for Resto Motors, inc.:
- a. Income statement for the year ended December 31, 2018
- b. Statement of retained earnings for the year ended December 31, 2018
- c. Balance sheet at December 31, 2018
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Chapter 1 Solutions
Financial Accounting, Student Value Edition (5th Edition)
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