Problem: The amounts of the assets and liabilities of Inkjet Supply Co. as of December 31, 19X4, and the revenues and expenses of the company for the year ended on that date follow. The items are listed in alphabetical order.
Accounts payable........................................................................$12, 000
Accounts receivable..................................................................... 3, 000
Building ...................................................................................... 56, 000
Cash ............................................................................................ 1, 000
Equipment ................................................................................... 21, 000
Interest expense........................................................................... 4, 000
Interest payable........................................................................... 1, 000
Land.............................................................................................. 8, 000
Note payable................................................................................. 31, 000
Property tax expense.................................................................. 2, 000
Rent expense.............................................................................. 14, 000
Salary expense.............................................................................. 38, 000
Service revenue ........................................................................ 104, 000
Supplies.......................................................................................... 7, 000
Utilities expense........................................................................... 3, 000
The beginning amount of Jana Sneller, Capital was $41, 000 and during the year Sneller withdrew $32, 000 for personal use.
Prepare the income statement of Inkjet Supply Co. for the year ended December 31, 19X4.
Prepare the company's statement of owner's equity for the year ended December 31, 19X4.
Prepare the company's balance sheet at December 31, 19X4.
Was the result of operations for the year a profit or a loss? How much?
Did Sneller, the owner of the business, drain off all its earnings for the year, or did she build the company's capital during the period? How would her actions affect the company's ability to borrow in the future?
How much in total economic resources does the company have as it moves into the new year? How much does the company owe? What is the dollar amount of Sneller's equity interest in the business at the end of the year?