Balance Sheet

Illustration
Use the following selected accounts balances for Magic Company to
prepare its classified balance sheet as on December 31:

Cash $13,000
Accounts receivable $17,000
Land $85,000
Accounts Payable $12,000
Long-term notes payable $33,000
Common Stock 30,000
Retained Earnings 40,000
 Illustration
On January 1, 2021, Manohar started Qual Photo Co.. The following
transactions took place during the first month:

Jan 1: Manohar invested Rs. 30,000 cash in the company’s share capital (shares of Rs.
10 each).
Jan 2: Bought supplies of photographic materials on credit, Rs. 9,000.
Jan 5: Bought photographic equipment for cash, Rs. 12,000.
Jan 7: Received fees for photographic services, Rs. 15,000.
Jan 13: Paid creditor for supplies, Rs. 5,000.
Jan 18: Manohar invested further Rs. 12,000 cash in the company’s share capital.
Jan 22: Billed customer’s for services, Rs. 19,000.
Jan 27: Paid office rent, Rs. 2,500, and electricity charges, Rs. 1,200.
Jan 30: Paid dividends, Rs. 4,000.
Jan 31: Prepared the monthly payroll to be paid on February 1, Rs. 11,500.

Analyze the effect of these transactions on the accounting equation and prepare the
balance sheet.
Income Statement
 Income Statement
Income statement is a statement of operations that reports revenues,
expenses, and net income for a stated period of time.

Companies earn revenues from the sale of goods or services to consumers. Revenues
normally are the amounts expected to be received for goods or services that have been
delivered to a customer.

Expenses represent the dollar amount of resources the entity used to earn revenues
during the period.

Net income or net earnings is the excess of total revenues over total expenses. If total
expenses exceeds total revenues, a net loss is reported.
 Income Statement
for the year Ended December 31, 2021

Revenues
Sales revenue $275.1
Expenses
Cost of goods sold $140.8
Selling, general &
administrative expenses $77.1
Interest expense $17.2
Income before income taxes $40.1
Income tax expense $17.1
Net Income $22.9
 Income Statement – Case 1
Considering the below mentioned information, prepare a balance sheet,
income statement and a statement of stockholder’s equity for the current
year. Retained earnings at the beginning of the year was $193.

Accounts Payable 237 Long term debt 94

Accounts receivable 15 Net income 100
Cash 301 Net sales 1,401
Common stock 120 Properties, net 92
Cost of sales 861 Retained earnings 293
Income before income taxes 103 Selling, general & adm. expenses 432
Income tax expense 3 Total assets 744
Interest expense 5 Total liabilities 331
Inventories 336 Total liabilities & shareholder’s equity 744
Total shareholder’s equity 413
 Income Statement – Case 2
Considering the below mentioned information, prepare an income
statement for the current year.
Particulars Amount Particulars Amount
Sales Revenue 10,89,000 Depreciation expense 30,600
Interest revenue 1,400 Loss on disposal of assets 4,200
Supplies expense 3,69,000 Interest expense 200
Wages expense 2,44,200 Income tax expense 76,400
Rent expense 66,000
Insurance expense 24,000
Utilities expense 90,300
Repairs expense 18,700
Training expense 40,800
Advertising expense 3,400
 Income Statement – Case 3
On January1, 2022, Ramesh started ProPhoto company. The following transactions
took place during the first month. Prepare accounting equation, income statement &
B/sheet.

Jan 1: Ramesh invested Rs. 30,000 cash in the company’s share capital (shares of Rs. 10 each).

Jan 2: Bought supplies of photographic materials on credit Rs. 9,000.

Jan 5: Bought photographic equipment for cash, Rs. 12,000.

Jan 7: Received fees for photographic services, Rs. 15,000.

Jan 13: Paid creditor for supplies, Rs. 5,000.

Jan 18: Ramesh further invested Rs. 12,000 in cash in the company’s share capital.

Jan 22: Billed customers for services, Rs. 19,000.

Jan 27: Paid office rent, Rs. 2,500, and electricity charges, Rs. 1,200.

Jan 30: Paid dividends, Rs. 4,000.

Prepare Trading and Profit & Loss Account and Balance Sheet
Prepare Trading and Profit & Loss Account and Balance Sheet