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General Instructions
1. The following worksheet may be used to complete the exercise/problem.
You may need to refer to your textbook for additional information.
E1-7
For each of the following cases, fill in the blank with the appropriate dollar amount.
Case 1 Case 2 Case 3 Case 4
Total assets, end of period $40,000 $34,000 $75,000 $50,000
General Instructions
1. The following worksheet may be used to complete the exercise/problem.
You may need to refer to your textbook for additional information.
E 1-10
of the year:
Accounts payable 5,000$
Accounts receivable 4,500
Capital stock 8,000
Cash 13,000
Required
Use the previous information to answer the following questions.
1. What is Prestige’s net income for the year?
Revenues:
Landscaping revenues 25,000$
2. What is Prestige’s Retained Earnings balance at the end of the year?
Statement of Retained Earnings
The following information is available from the records of Prestige Landscape Design Inc. at the end
3. What is the total amount of Prestige’s assets at the end of the year?
Assets:
4. What is the total amount of Prestige’s liabilities at the end of the year?
Liabilities:
5. How much owners’ equity does Prestige have at the end of the year?
Stockholders’ Equity:
6. What is Prestige’s accounting equation at the end of the year?
General Instructions
1. The following worksheet may be used to complete the exercise/problem.
You may need to refer to your textbook for additional information.
P 1-3
The following items are available from records of Freescia Corporation at the end of the current year:
Accounts payable 12,550$
Accounts receivable 23,920
Advertising expense 2,100
Buildings 85,000
Capital stock 25,000
Cash 4,220
Notes payable 50,000
Office equipment 12,000
Retained earnings, end of year 37,590
Salary and wage expense 8,230
Sales revenue 14,220
Required
Prepare a balance sheet. Hint: Not all of the items listed should appear on a balance sheet. For
each non-balance-sheet item, indicate where it should appear.
Note: List assets and liabilities in the order of liquidity.
Cash 4,220$
FREESCIA CORPORATION
BALANCE SHEET
END OF THE YEAR
Assets
General Instructions
1. The following worksheet may be used to complete the exercise/problem.
You may need to refer to your textbook for additional information.
P1-5A
Accounts payable 4,500$
Accounts receivable 300
Advertising expense 14,500
Capital stock 50,000
Cash 2,490
Display fixtures 45,000
Dividends paid during the year 12,000
Notes payable 10,000
Rental revenue 125,900
Rent expense 60,000
Retained earnings 35,390
Salaries and wages expense 17,900
Supplies inventory 70,000
Water, gas, and electricity 3,600
Required
1. Prepare an income statement for the year ended December 31, 2016.
Rental revenue 125,900$
2. Prepare a statement of retained earnings for the year ended December 31, 2016.
Retained earnings, beginning of year 35,390$
INCOME STATEMENT
FOR THE YEAR ENDED DECEMBER 31, 2016
STERNS AUDIO BOOK RENTAL CORP.
STATEMENT OF RETAINED EARNINGS
FOR THE YEAR ENDED DECEMBER 31, 2016
The following list, in alphabetical order, shows the various items that regularly appear
on the financial statements of Sterns Audio Book Rental Corp. The amounts shown
for balance sheet items are balances as of December 31, 2016 (with the exception of
retained earnings, which is the balance on January 1, 2016), and the amounts shown for
income statement items are balances for the year ended December 31, 2016.
STERNS AUDIO BOOK RENTAL CORP.
3. Prepare a balance sheet at December 31, 2016.
Note: List assets and liabilities in the order of liquidity.
Assets
Cash 2,490$
Accounts receivable 300
4. You have $1,000 to invest. On the basis of the statements you prepared, would you use it to buy
stock in this company? Explain. What other information would you want before deciding?
On the basis of these statements alone, Sterns would appear to be a good candidate for an investment.
BALANCE SHEET
DECEMBER 31, 2016
STERNS AUDIO BOOK RENTAL CORP.
General Instructions
1. The following worksheet may be used to complete the exercise/problem.
P1-5
ended September 30, 2016.
Required
1. Prepare an income statement for the month ended September 30, 2016.
Revenues:
Ticket sales 95,100$
2. Prepare a statement of retained earnings for the month ended September 30, 2016.
FOR THE MONTH ENDED SEPTEMBER 30, 2016
MAPLE PARK THEATRES CORP.
The following list, in alphabetical order, shows the various items that regularly appear on the financial
statements of Maple Park Theatres Corp. The amounts shown for balance sheet items are balances
as of September 30, 2016 (with the exception of retained earnings, which is the balance on
September 1, 2016); and the amounts shown for income statement items are balances for the month
MAPLE PARK THEATRES CORP.
INCOME STATEMENT
Retained earnings, beginning balance, September 1, 2016 73,780$
Cash 15,230$
Accounts receivable 6,410
Land 26,000
4. You have $1,000 to invest. On the basis of the statements you prepared, would you use it to buy
stock in Maple Park? Explain. What other information would you want before making a
final decision?
On the basis of these statements alone, Maple Park would appear to be a good candidate for an investment.
It is operating at a profit and is paying dividends. Before one makes an investment in Maple Park stock,
SEPTEMBER 30, 2016
Assets
STATEMENT OF RETAINED EARNINGS
FOR THE MONTH ENDED SEPTEMBER 30, 2016
MAPLE PARK THEATRES CORP.
BALANCE SHEET
