Reference no: EM132649122
Question - The amounts of the assets and liabilities of Harada Office Cleaning as of December 31, 2020, and the revenues and expenses of the company for the year ended on December 31, 2020, appear below. The items are listed in alphabetical order.
Accounts Payable $40,000
Land $100,000
Accounts Receivable 50,000
Note Payable 200,000
Building 350,000
Property Tax Expense 10,000
Cash 25,000
Repairs Expense 30,000
Equipment 110,000
Salaries Expense 280,000
Furniture 18,000
Service Revenue 650,000
Interest Expense 14,000
Supplies 10,000
Interest Payable 3,000
Utilities Expense 25,000
Y. Harada, Withdrawals 71,000
The beginning amount of owner's equity was $200,000. During the year, the owner made no investments.
Required -
1. Prepare the income statement of Harada Office Cleaning for the year ended December 31, 2020. List expenses in order from highest to lowest amount.
2. Prepare the statement of owner's equity of the business for the year ended December 31, 2020.
3. Prepare the balance sheet of the business at December 31, 2020.
4. Answer these questions about Harada Office Cleaning:
5. Was the result of operations for the year a profit or a loss? How much was it?
6. Did the business's owner's equity increase or decrease during the year? How would this affect the business's ability to borrow money from a bank in the future?
7. How much in total economic resources does the company have at December 31, 2020, as it moves into the new year? How much does the company owe? What is the dollar amount of the owner's portion of the business at December 31, 2020?