PREPARE A PROPERLY CLASSIFIED BALANCE SHEET AD MULTIPLE STEP INCOME STATEMENT

Question

Restaurant revenue- Credit 1,000

Cost of restaurant revenue- Debit 200

Telephone expenses- Debit 100

Cash- Debit 500

Accounts Receiveable- Debit150

Supplies Inventory-Debit 20

LAnd- Debit 200

Building, net- Debit 1,000

Equipment- Debit 1,500

Furniture, net- Debit 250

Accounts Payable- Credit 400

Capital- Credit 2000

Dividends- Debit 300

Short term liability-Credit 670

Salaries payable-Credit 650

Salaries expense- Debit 600

tax payable- Credit 100

Total- Debit- 4820 Credit-4820

Answer 1

Firstly, we need to classify data to Balance sheet and Income statement. All assets, liabilities and capital go to Balance sheet. All expenses and revenue go to income statement.l

Balance Sheet

Assets

Cash 500

Accounts receivable 150

Inventory 20

Total current assets (sum of all the above) 670

Land 200

Building, net 1,000

Equipment 1,500

Furniture 250

Total non-current assets 2,950

Total assets 3,620

Liabilities and Shareholders' equity (ShEq)

Accounts payable 400

Short-term liabilities 670

Salaries payable 650

Tax payable 100

Total liabilities 1,820

Capital 2,000

Retained Earnings (200) (please look at Income statement)

Total ShEq 1,800

Total liabilities and ShEq 3,620

Check Assets=Liabilities and ShEq

Income Statement

Revenue 1,000

Cost of revenue (200)

Telephone expenses (100)

Salaries expense (600)

Net income (sum of all the above) 100

Less Dividends (300)

Retained earnings (200) (go to the Balance sheet)