Transactions during 2020 follow:Borrowed $20,000 cash on July 1, 2020, signing a one-year, 10 percent note payable.Purchased equipment for $18,000 cash on July 1, 2020.Sold 10,000 additional shares of capital stock for cash at $0.50 market value per share at the beginning of the year.Earned $70,000 in revenues for 2020, including $14,000 on credit and the rest in cash.Incurred $27,000 in wages expense and $8,000 in miscellaneous expenses for 2020, with $7,000 on credit and the rest paid with cash. Note: Wages are paid in cash.Purchased additional small tools, $3,000 cash.Collected accounts receivable, $8,000.Paid accounts payable, $11,000.Purchased $10,000 of supplies on account.Received a $3,000 deposit on work to start January 15, 2021.Declared a cash dividend on December 1, $10,000; paid on December 31. Data for adjusting entries:Supplies of $4,000 and small tools of $8,000 were counted on December 31, 2020 (debit Miscellaneous Expenses).Depreciation for 2020, $2,000.Interest accrued on notes payable (to be computed).Wages earned since the December 24 payroll but not yet paid, $3,000.Income tax expense was $4,000, payable in 2021. 4. Prepare an income statement (including earnings per share), statement of stockholders' equity, and balance sheet.Complete this question by entering your answers in the tabs below.Stmt ofStockholders Balance SheetIncomeStatementEquityPrepare a statement of stockholders' equity.FURNITURE REFINISHERS, INC.Statement of Stockholders' EquityFor the Year Ended December 31, 2020AdditionalTotalCommonStockRetainedPaid-inStockholders'EarningsCapitalEquityBalance, January 1, 2020Balance, December 31, 2020< Income StatementBalance Sheet> Aubrae and Tylor Williamson began operations of their furniture repair shop (Furniture Refinishers, Inc.) on January 1, 2019.The annual reporting period ends December 31. The trial balance on January 1, 2020, was as follows:Furniture Refinishers, Inc.Trial Balance on January 1, 2020Account TitlesDebitCreditCash5,0004,0002,0006,000Accounts receivableSuppliesSmall toolsEquipmentAccumulated depreciation (on equipment)Other assets (not detailed to simplify)Accounts payableDividends payableNotes payable9,0007,000Wages payableInterest payableIncome taxes payableUnearned revenueCommon stock (60,000 shares, $0.10 par value)Additional paid-in capitalRetained earnings6,0009,0004,000Service revenueDepreciation expenseWages expenseInterest expenseIncome tax expenseMiscellaneous expensesTotals26,00026,000

The income statement is one of a company’s core financial statements that is prepared to find out…

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FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Transactions during 2020 follow:

Borrowed $20,000 cash on July 1, 2020, signing a one-year, 10 percent note payable.
Purchased equipment for $18,000 cash on July 1, 2020.
Sold 10,000 additional shares of capital stock for cash at $0.50 market value per share at the beginning of the year.
Earned $70,000 in revenues for 2020, including $14,000 on credit and the rest in cash.
Incurred $27,000 in wages expense and $8,000 in miscellaneous expenses for 2020, with $7,000 on credit and the rest paid with cash. Note: Wages are paid in cash.
Purchased additional small tools, $3,000 cash.
Collected accounts receivable, $8,000.
Paid accounts payable, $11,000.
Purchased $10,000 of supplies on account.
Received a $3,000 deposit on work to start January 15, 2021.
Declared a cash dividend on December 1, $10,000; paid on December 31.

Data for adjusting entries:

Supplies of $4,000 and small tools of $8,000 were counted on December 31, 2020 (debit Miscellaneous Expenses).
Depreciation for 2020, $2,000.
Interest accrued on notes payable (to be computed).
Wages earned since the December 24 payroll but not yet paid, $3,000.
Income tax expense was $4,000, payable in 2021.

4. Prepare an income statement (including earnings per share), statement of stockholders' equity, and balance sheet.
Complete this question by entering your answers in the tabs below.
Stmt of
Stockholders Balance Sheet
Income
Statement
Equity
Prepare a statement of stockholders' equity.
FURNITURE REFINISHERS, INC.
Statement of Stockholders' Equity
For the Year Ended December 31, 2020
Additional
Total
Common
Stock
Retained
Paid-in
Stockholders'
Earnings
Capital
Equity
Balance, January 1, 2020
Balance, December 31, 2020
< Income Statement
Balance Sheet
>

Aubrae and Tylor Williamson began operations of their furniture repair shop (Furniture Refinishers, Inc.) on January 1, 2019.
The annual reporting period ends December 31. The trial balance on January 1, 2020, was as follows:
Furniture Refinishers, Inc.
Trial Balance on January 1, 2020
Account Titles
Debit
Credit
Cash
5,000
4,000
2,000
6,000
Accounts receivable
Supplies
Small tools
Equipment
Accumulated depreciation (on equipment)
Other assets (not detailed to simplify)
Accounts payable
Dividends payable
Notes payable
9,000
7,000
Wages payable
Interest payable
Income taxes payable
Unearned revenue
Common stock (60,000 shares, $0.10 par value)
Additional paid-in capital
Retained earnings
6,000
9,000
4,000
Service revenue
Depreciation expense
Wages expense
Interest expense
Income tax expense
Miscellaneous expenses
Totals
26,000
26,000

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