Assignment 1
Karen Williams
Linda Denny MD
Income Statement
For the month ended of October 2014
Service revenue ……………23,000
Expenses
Rent expense……………………………………2,000
Salaries and wages expense ……………. 9,000
Utilities expense……………………………..….700
Supplies…………………………………….……..2,800
Net Income …………………………………..22,000
Linda Denny MD
Statement of Retained earnings
October 2014
Retained earnings (beg) ……15,000
Add: Net Income……………..22,000
37,000
Less: Dividend ……………….. (6,000)
R.E (ending) 31,000
Linda Denny MD
Balance Sheet
October 31, 2014
Assets Liabilities& Stockholders’ Equity
Cash …………………………….…..11,000 Accounts Payable…………….. 6,000
Accounts Receivable ………..10,000 Common Stock…………………30,000
Supplies……………………………..2,800 Retained Earnings …………..…15,000
Equipment ………………….…29,000 Insurance expense…………..…3,500
Service revenue……………….23,000 Utilities expense……………………700
Salaries & wages expense…. 9,000
Rent expense…………………..…2,000
Dividends………………………..…6,000
Total 75,800 72,200
Donovan Company
Classified Balance Sheet
December 31, 2014
Assets
Cash 18,840
Accounts receivable 15,600
Buildings 95,800
Equipment 79,400
Land 61,200 Total 270,840
Less:
Accumulated depreciation—buildings 45,600
Accumulated depreciation—equipment 18,720
Total 206,520
Liabilities and stockholders’ equity
Accounts payable 15,500
Mortgage payable 88,600
-13,600 = 75,000
Common stock 57,000
Service revenue 17,180
Retained earnings (January 1, 2014) 40,000
Prepaid insurance 4,680
Insurance expense 780
Interest payable 3,600
Less:
Depreciation expense 7,300 Total 206,440
Interest expense 2,600
Instructions
Prepare a classified balance sheet. Assume that $13,600 of the mortgage payable will be
paid in 2015.
•Current Ratio 250,000/175,000 = 1.42
•Assets/liabilities
•Working Capital 250,000 – 175,000= 75,000
•Assets-liabilities
•Earnings Per Share 48,000-0/40,000= 1.2
•Earnings per Share (EPS) = Net Income − Dividends on Preferred Shares/
Weighted Average Number of Common Shares Outstanding
•Debts to assets Ratio 175,000/250,000 =0.7
•Liabilities/Assets