Chapter 2 Basic Accounting Concepts 83Instructions
- Prepare an income statement for the year ending December 31, 2007.
- Prepare a retained earnings statement for the year ending December 31, 2007.
- Prepare a balance sheet as of December 31, 2007.
- Prepare a statement of cash flows for the year ending December 31, 2007.
After its second year of operations, the following amounts were taken from the accounting
records of Lisko Services, Inc., as of December 31, 2008. Lisko Services began its operations on
January 1, 2007 (see Problem 2-3A).Capital stock $ 35,000
Cash?
Dividends 21,000
Fees earned 355,740
Interest expense 2,240
Land 196,000
Miscellaneous expense 9,800
Notes payable 28,000
Rent expense 39,200
Salaries expense 98,000
Taxes expense 28,000
Utilities expense 50,400Instructions
- Prepare an income statement for the year ending December 31, 2008.
- Prepare a retained earnings statement for the year ending December 31, 2008.
(Note:The retained earnings at January 1, 2008, was $108,500.) - Prepare a balance sheet as of December 31, 2008.
- Prepare a statement of cash flows for the year ending December 31, 2008.
(Hint:You should compare the asset and liability amounts of December 31, 2008, with
those of December 31, 2007, to determine cash used in investing and financing activities.
See Problem 2-3A for the December 31, 2007, balance sheet amounts.)
The financial statements at the end of Sciatic Realty, Inc.’s first month of operation are shown
below. By analyzing the interrelationships between the financial statements, fill in the proper
amounts for (a) through (s).Problem 2-4A
Financial statements
Goal 5
- Net income, $128,100
Problem 2-5A
Missing amounts from finan-
cial statements
Goals3, 5
a. $19,500
Sciatic Realty, Inc.
Income Statement
For the Month Ended July 31, 2007Fees earned $ (a)
Operating expenses:
Wages expense $5,520
Rent expense 3,000
Utilities expense (b)
Interest expense 300
Miscellaneous expense 660
Total operating expenses 11,250
Net income $ (c )