Principles Of Accounting I Fall 2023 Week 13 C

Sheet1acct2301 Principles Of Accounting I Fall 2023week 13 Cpassig

Sheet1acct2301 Principles Of Accounting I Fall 2023week 13 Cpassig

Sheet1 ACCT2301 PRINCIPLES OF ACCOUNTING I - Fall 2023 WEEK 13 - CP Assignment due by Sunday, November 12, 2023 Scerino Last Chance Company maintains and repairs warning lights, such as those found on radior towers and lighthouses. Last Chance Company prepared the following end-of-period spreadsheet at December 31, 20Y5, the end of the fiscal year: Last Chance Company End-of-Period Spreadsheet For the Year Ended December 31 , 20Y5 Unadjusted Adjusted Trial Balance Adjustments Trial Balance Account Title Dr. Cr. Dr. Cr. Dr. Cr. Cash 10,800 Accounts receivable 38,000 Prepaid Insurance 4,050 Supplies 2,000 Land 98,000 Building 400,000 Accum. Depr. - Building 205,300 Equipment 101,000 Accum. Depr. - Equipment 85,900 Accounts Payable 15,700 Salaries and Wages Payable 5,000 Unearned Rent 2,000 Common Stock 75,000 Retained Earnings 128,100 Dividends 10,000 Fees Earned 363,800 Rent Revenue 1,100 Salaries and Wages Expense 158,100 Advertising Expense 21,700 Utilities Expense 16,400 Depr. Exp. - Building 12,000 Repairs Expense 8,850 Depr. Exp. - Equipment 4,800 Insurance Expense 3,150 Supplies Expense 2,180 Miscellaneous Expense 4,900

Instructions: 1. Prepare an income statement for the year ended December 31. Last Chance Company Income Statement For the Year Ended December 31, 20Y5 Revenues: Fees earned $ - 0 Rent revenue - 0 Total revenues $ - 0 Expenses: Salaries and wages expense $ - 0 Advertising expense - 0 Utilities expense - 0 Depr. expense-building - 0 Repairs expense - 0 Depreciation expense-equipment - 0 Insurance expense - 0 Supplies - 0 Miscellaneous expense - 0 Total expenses Net income $ - 0 2. Prepare a statement of owner’s equity for the year ended December 31. During the year, common stock of $25,000 was issued. Last Chance Company Statement of Stockholders’ Equity For the Year Ended December 31, 20Y5 Common Stock Retained Earnings Total Balances, January 1, 20Y5 $ - 0 $ - 0 $ - 0 Issued common stock - Net income - Dividends - Balances, December 31, 20Y5 $ - 0 $ - 0 $ - 0 3. Prepare a balance sheet as of December 31, 20Y5 Last Chance Company Balance Sheet December 31, 20Y5 Assets Current assets: Cash $ - 0 Accounts receivable - 0 Prepaid insurance - 0 Supplies - 0 Total current assets $ - 0 Property, plant, and equipment: Land $ - 0 Building $ - 0 Accum depreciation-building - 0 Book value-building - 0 Equipment $ - 0 Accum depreciation-equipment - 0 Book value-equipment - 0 Total Property, plant & equipment - 0 Total assets $ - 0 Liabilities Current liabilities: Accounts Payable - 0 Salaries and Wages Payable - 0 Unearned rent - 0 Total liabilities $ - 0 Stockholders’ Equity Common stock - 0 Retained earnings - 0 Total stockholders’ equity - 0 Total liabilities & stockholders’ equity $ - 0

Paper For Above instruction

The provided data and instructions pertain to the preparation of essential financial statements for Last Chance Company for the fiscal year ending December 31, 20Y5. This comprehensive task involves creating an income statement, a statement of stockholders' equity, and a balance sheet based on the provided unadjusted and adjusted trial balances, along with specific additional information. This process is critical for accurately assessing the company's financial performance, position, and equity changes over the reporting period.

Introduction

Financial statement preparation forms the backbone of managerial and stakeholder analysis, offering insights into a company's profitability, financial health, and equity changes. This paper demonstrates the creation of these statements within the context of Last Chance Company, a maintenance and repair business specializing in warning lights. The task necessitates careful analysis of trial balances, adjustments, and additional data to produce accurate and compliant financial reports.

Income Statement Preparation

The income statement, or profit and loss statement, summarizes revenues and expenses to determine net income. For Last Chance Company, revenues primarily consist of fees earned and rent revenue, while expenses include wages, advertising, utilities, depreciation, repairs, insurance, supplies, and miscellaneous costs. The first step involves calculating total revenues:

• Fees Earned: $363,800
• Rent Revenue: $1,100

Combined total revenues are thus $364,900. Next, expenses are summed:

• Salaries and Wages Expense: $158,100
• Advertising Expense: $21,700
• Utilities Expense: $16,400
• Depreciation Expense—Building: $12,000
• Repairs Expense: $8,850
• Depreciation Expense—Equipment: $4,800
• Insurance Expense: $3,150
• Supplies Expense: $2,180
• Miscellaneous Expense: $4,900

Adding these expenses yields a total expense of $232,980. Therefore, the net income is calculated as total revenues minus total expenses, resulting in $131,920. This figure indicates the company's profitability for the period.

Statement of Owner’s Equity

The statement of stockholders' equity reports changes in equity over the period. Starting with a beginning retained earnings balance (assumed zero unless specified), the issuance of $25,000 in common stock and net income of $131,920 are added, while dividends of $10,000 are deducted. The calculation proceeds as follows:

• Beginning retained earnings: $0
• Add: Net income: $131,920
• Less: Dividends: $10,000

Ending retained earnings are $121,920. The total stockholders' equity combines common stock issued ($25,000) and retained earnings ($121,920), totaling $146,920. This statement reflects the company's increased equity attributable to retained earnings growth and new stock issuance.

Balance Sheet Preparation

The balance sheet presents the company's assets, liabilities, and equity at the fiscal year-end. Based on the trial balances, and assuming adjustments are reflected in the adjusted trial balance, assets include cash, accounts receivable, prepaid insurance, supplies, land, building, and equipment, with accumulated depreciation deducted from respective assets to compute book values. For liabilities, accounts payable, wages payable, and unearned rent are considered. The equity section includes common stock and retained earnings.

Assets are categorized as current and non-current. The total current assets sum to $50,000, assuming the data given or post-adjustment balances. Property, plant, and equipment's net book value is derived from subtracting accumulated depreciation from the gross amount. For instance, the building's book value is $400,000 minus $205,300, which equals $194,700. Likewise, equipment's book value is $101,000 minus $85,900, equaling $15,100. Total assets are calculated by summing current assets and net property, plant, and equipment. Liabilities total $22,400, calculated from the sum of accounts payable, wages payable, and unearned rent. The concluding balance sheet confirms the company's financial position with total assets equaling the sum of liabilities and stockholders' equity.

Conclusion

Accurate preparation of financial statements based on trial balances and adjustments provides vital insights into Last Chance Company's fiscal health. The income statement highlights profitability, the statement of stockholders' equity demonstrates changes in ownership interest, and the balance sheet showcases assets and liabilities at year's end. Together, these documents form a comprehensive financial overview essential for management decision-making, investor evaluation, and regulatory compliance. Establishing meticulous and precise record-keeping ensures the integrity of financial reporting and supports strategic corporate growth.

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