Question

The amounts of the assets and liabilities of Nordic Travel Agency at December 31, 2019, the end of the year, and its revenue and expenses for the year follow. The capital of Ian Eisele, owner, was $670,000 on January 1, 2019, the beginning of the year. During the year, Ian withdrew $42,000. Accounts Amounts Accounts payable $ 69,500 Accounts receivable 285,000 Cash 190,500 Fees earned 912,500 Land 544,000 Miscellaneous expense 6,400 Rent expense 36,000 Supplies 5,500 Supplies expense 4,100 Utilities expense 28,500 Wages expense 510,000 Required: 1. Prepare an income statement for the year ended December 31, 2019\.\* 2. Prepare a statement of owner’s equity for the year ended December 31, 2019\.\* 3. Prepare a balance sheet as of December 31, 2019\.\* 4. What item appears on both the statement of owner’s equity and the balance sheet? * Refer to the information given and the lists of Accounts, Labels, and Amount Descriptions provided for the exact wording of the answer choices for text entries. Be sure to complete the statement heading. If a net loss is incurred or there is a decrease in owner’s equity, enter that amount as a negative number using a minus sign.

Answer 1

Answer:

Incoem Statement:

Fees earned                912,500

Rent expense       - 36,000

Supplies expense -    4,100

Utilities expense   - 28,500

Misc  expense      -     6,400

Wages expense   - 510,000      

Net Income                 327,500

 327.5 955.5

Owners Equity

Beginning           670,000

Net Income         327,500

Withdrawals         -42,000  

Ending                 955,500

Balance Sheet

Cash               190,500

A/R                 285,000

Supplies             5,500

Total Current  481,000

Land               544,000  

Total Assets 1,025,000

Liabilities

Accounts Payable           69,500

capital of Ian Eisele       955,500

Total Liaiblity + Equity  1,025,000

The acccount: "Capital of Ian Eisele"

Appears in both, owners equity and balance sheet.

Explanation:

For the income statement we decrease all expenses account from the fees earned.

Then, for statement of owners equity we increase the beginning capital by the net income and decrease it by the withdrawals.

Last, we use that amount for the balance sheet.

The land is considered non-currnet asset as will not be realized within the next 12 month.