Problem:
Kaffen Company, a ski tuning and repair shop, opened on November 1, 2013. The company carefully kept track of all its cash receipts and cash payments. The following information is available at the end of the ski season, April 30, 2014.
|
|
Cash
Receipts |
|
Cash
Payments |
| Issuance of common shares |
|
$19,600 |
|
|
| Payment to purchase repair shop equipment |
|
|
|
$ 9,100 |
| Rent payments |
|
|
|
1,260 |
| Newspaper advertising payment |
|
|
|
340 |
| Utility bill payments |
|
|
|
830 |
| Part-time helper's wage payments |
|
|
|
2,130 |
| Income tax payment |
|
|
|
10,400 |
| Cash receipts from ski and snowboard repair services |
|
31,540
|
|
|
| Subtotals |
|
51,140 |
|
24,060 |
| Cash balance |
|
|
|
27,080
|
| Totals |
|
$51,140
|
|
$51,140
|
The repair shop equipment was purchased on November 1 and has an estimated useful life of 5 years. The company rents space at a cost of $180 per month on a one-year lease. The lease contract requires payment of the first and last months' rent in advance, which was done. The part-time helper is owed $480 at April 30, 2014, for unpaid wages. At April 30, 2014, customers owe Kaffen Company $390 for services they have received but have not yet paid for.
Required:
Question 1: Prepare an accrual-basis income statement for the 6 months ended April 30, 2014.
Question 2: Prepare the April 30, 2014, classified balance sheet.
Note: Please show the work not just the answer.