Independent of your responses in Requirement I (above) assume the following list
ID: 2484188 • Letter: I
Question
Independent of your responses in Requirement I (above) assume the following list of December 31, 2016 ending balances for HZMT. Your charge is to prepare (a) an income statement, (b) statement of retained earnings, and (c) a balance sheet for 2016 year end.
Account Title
Accounts payable
10,000
Accounts Receivable
18,000
Cash
12,200
Common Stock
4,800
Dividends
4,800
Land
38,000
Long term note payable
19,000
Marketing expense
1,200
Mileage expense
2,600
Miscellaneous expense
260
Office supplies
690
Prepaid insurance
2,500
Retained earnings (beginning)
6,450
Salary expense
40,000
Transport revenue
80,000
Account Title
Accounts payable
10,000
Accounts Receivable
18,000
Cash
12,200
Common Stock
4,800
Dividends
4,800
Land
38,000
Long term note payable
19,000
Marketing expense
1,200
Mileage expense
2,600
Miscellaneous expense
260
Office supplies
690
Prepaid insurance
2,500
Retained earnings (beginning)
6,450
Salary expense
40,000
Transport revenue
80,000
Explanation / Answer
Answer a. HZMT Income Statement For the period ended Dec. 31, 2016 Revenue Transport Revenue 80,000 Less: Expenses Marketing expenses 1,200 Mileage Expenses 2,600 Misc. Exp. 260 Office Supplies 690 Salary expenses 40,000 44,750 Net Income 35,250 Answer b. HZMT Statement of Retained Earnings As on Dec. 31, 2016 Beginning Balance 6,450 Less: Dividends (4,800) Add: Net Income 35,250 Closing Balance 36,900 Answer c. HZMT Balance Sheet As on Dec. 31, 2016 Assets Cash 12,200 Accounts Receivables 18,000 Prepaid Insurance 2,500 Total Current Assets 32,700 Tangible Assets Land 38,000 Toatl Tangible Assets 38,000 Total Assets 70,700 Liabilities and Stockholders' Equity Current Liabilities Accounts Payable 10,000 Total Current Liabilities 10,000 Non-Current Liabilities Long term Notes Payable 19,000 Total Non-Current Liabilities 19,000 Total Liabilities 29,000 Stockholders's Equity Common Stock 4,800 Retained Earnings 36,900 Total Stockholders' Equity 41,700 Total Liabilities and Stockholders' Equity 70,700