Question 1: Income statement

Sunshine Dental Lte

Income statement
For the Month ended Novemver 31,2020

Revenues
Service Revenues 23,000
Expences
Insuranc expense 3,500
Utilities pense 700
Salaries and wage expense 9,000
Rent expense 2,000
Total expense 15,200

Net incom (Revenue- total expense) 7,800

Question 1: Retained earning

Sunshine Dental Ltd
Retained earning statement
For the month ended November 32, 2020

Retained earning, Nov1 15,000

Add Net income 7,800
22,800

Less Dividends 6,000

Retained earning, Nov 31 16,800

Question 1: Balance Sheet Sunshine Dental Ltd

Balance Sheet
November 31, 2020
Assets
Cash
Account Recievable
Supplies
Equipment
Total Assets

Liabilites and Stockholders'Equity

 Liabilities
Account payable
Total liabilities

Stockholder equity
Common Stock
Retained earning
Total stockholder equity

Total liabilities and stock holder equity

Transactions Accounts Increase/ Decreas

Question 2:
1 Prepaied insurance Increase
(Cash ) Decrease

2 Salaries and wage expense Increase

(cash) Decrease

3 Supplies Increase
Account payable Increase

4 Utility expense
Account payable Increase

Qestion 3:
(e) Ending retained earning+ Dividends-Beginning retained earning= Net income
24,000 + 5,000 - 10,000 = 19,000

(d) Net income = 19,000

(c) Net income = Revenue - cost of good sold - Administrative expenses

19000 = 80,000 - C - 10,000
C = 51,000

(b) Retained earning = 24,000

(a) Total liabilities + common stock + Retained earning = Total liabilities an

5,000 + (a) + 24,000 55,000
(a) = 26,000
Question 4 1- b 2- f 3- g 4- d 5- e 6- a

Question 5
Assets = Liabilities + Stockholders' Equity
Retained Earning
Cash + A/R Supp + Equip = Accts Pay+com. Stock + Rev - Exp - Div
1- 25,000 25,000
2- -1,000 5,000 4,000
3- -750 750
4- 3,400 5,900 9,300
5- -1,500 -1,500
6- -2,000
7- -800 -800
8- 450 -450
9- -4,000 -4,000
10- 500 -500

(a) Stockholders'Equity= common stock + Retad Earning(Reve- Expense - Div)

Stockholders'Equity= 25,000 + 9,300 - 5,300 - 2,000 = 27,000

(b) Net Income = Revenue - expense

Net Income = 9,300 - (-800-4,000-500) = 4,000

Question 6

Transactions cash + A/R + Supplies + Equip = A/Pay + Com.sto + Retain.Earning

1-Jul 35,000 35,000
1) Balance 35,000 35,000

2) -2,000 4,000 2,000

Balance 33,000 4,000 2,000 35,000

3) -1,400 1,400
Balance 31,600 1,400 4,000 2,000 35,000

4) 200 -200
Balance 31,600 1,400 4,000 2,200 35,000 -200
 5) 1,500 1,500
Balance 33,100 1,400 4,000 2,200 35,000 1,300

6) -200 -200
Balance 32,900 1,400 4,000 2,200 35,000 1,100

7) 300 300
Balance 32,900 300 1,400 4,000 2,000 35,000 1,400

8) -200 -200
Balance 32,700 300 1,400 4,000 1,800 35,000 1,400

9) -1,200 -1,200
Balance 31,500 300 1,400 4,000 1,800 35,000 200

10) 100 -100

Balance 31,500 300 1,400 4,000 1,900 35,000 100

Question7 1) A 2)B 3) C 4)E 5)D 6)E 7)F

Question 8 1) D 2) B 3) B 4) C 5) B 6) C 7) B 8) E

Question 9

Drexler Brewing Company

Bank Reconciliation
Augest, 31

Cash balance per book statement 7,000

Add Deposit in transit 6,000

Less Outstanding check 5,800

Adjusted cash balance per bank 7,200

 Cash balance per book statement 5,659

Add
Error in recording check NO. 138 81
Note recievable and interest 2060

Less
NSF check 560
Check printing charge 40

Adjusted cash balance per book 7200

No.3 There is no effect

Assets = Liabilities + Stockholders' Equity

Cash A/R N/R A/P Rev Exp

81 -81
2060 2060
-560 560
-40

Question 10
Question 11 Total unit= 225+ 525 + 750= 1,500

Ending Innentory = total unit - unit sold= 1500 - 1100 = 400

Total unit cost = 1125 + 3150 + 5250 = 9500

FIFO 400 x 7= 2800 Average cost

LIFO 225 x 5 = 1125

175 x 6 = 1050 400 x 6.35 = 2,533

1125+ 1050 = 2175

FIFO has the highest inventory balance and the highst net income as well.

Question 12 Mcdonald Company

Income Statement
For the year ended December 31, 2019

Sales
Sales Revenue 645,000
Less Sales discount and allowance 50,000
Sales discount 9,500
59,500
Net Sale 585,500
Less Cost of good sold 396,000
Gross profit 189,500

Opreating expenses
 Salaries and wage expense 84,000
Utilities expense 23,000
Advertising expense 15,000
Depreciation expense 3,500
Freight-out 7,000
132,500
Other Revenue and gains
Interest Revenue 25,000

Other expense and loss

Interest expense 19,000

Income before taxes 63,000

Question 13
 Sunshine Dental Ltd
Balance Sheet
November 31, 2020

11,000
10,000
2,800
29,000
52,800

olders'Equity
 6,000
6,000

30,000
16,800
46,800

52,800

Increase/ Decreas

= Net income

kholders' equity
 Retained Earning
- Exp - Div
com.stock

Ser.Rev This line is the first month of operations in this company.

-2,000 Div
Ren Exp

Sal.Exp
Util.Exp

Retain.Earning
9) ????? 10) A

Increase cash balance per bank

decrease cash balance per bank

 increase in cash

decrease in cash
Bank expense, decrease cash

Stockholders' Equity

Div

-40 Bank charge expenses

 The cost of good sold (FIFO) = 9,500 - 2,800 = 6,700

Average cost The cost of good sold (LIFO) = 9,500- 2,175 = 7,325
cost per unit = 9500 /1500 = 6.33
The cost of good sold (Average cost) = 9,500 - 2,533 = 6,967
400 x 6.35 = 2,533

Profit Margin = Net income/Net sale

Profit margin = 63,000/ 585,500 = 0.10

Gross profit rate = Gross profit/ Net sales

Gross profit = 189,500/ 585,500 = 0.32