Preparation and Interpretation of Financial Statements
Fuel Designs' financial accounts follow. The company has just completed its tenth year of operations ended December 31, 2014.
|
Accounts Payable
|
$ 3,600
|
|
Accounts Receivable
|
4,500
|
|
Cash
|
71,700
|
|
Commission Sales Revenue
|
400,000
|
|
Commissions Expense
|
225,000
|
|
Commissions Payable
|
22,700
|
|
Equipment
|
59,900
|
|
Marketing Expense
|
20,100
|
|
Office Rent Expense
|
36,000
|
|
Owner's Capital, December 31, 2013
|
64,300
|
|
Supplies
|
700
|
|
Supplies Expense
|
2,600
|
|
Telephone and Computer Expenses
|
5,100
|
|
Wages Expense
|
32,000
|
|
Withdrawals
|
33,000
|
Required:
1. Prepare Fuel Designs' income statement, statement of owner's equity, and balance sheet. There were no investments by the owner during the year.
2. Accounting Connection- The owner is considering expansion. What other financial statement would be useful to the owner in assessing whether the compa- ny's operations are generating sufficient funds to support the expenses? Why would it be useful?