Heads Up Company was started several years ago by two hockey instructors. The company's comparative balance sheets and income statement follow, along with additional information. Balance Sheet at December 31 Cash Accounts Receivable Equipment Accumulated Depreciation-Equipment Total Assets Accounts Payable Salaries and Wages Payable Notes Payable (long-term) Connon Stock Retained Earnings Total Liabilities and Stockholders' Equity Income Statement Service Revenue Salaries and Wages Expense Depreciation Expense Loss on Disposal of Equipment Income Tax Expense Net Income Current Year Previous Year $ 3,800 1,650 4,500 (1,200) $6,400 850 4,700 (1,250) $ 10,700 $ 550 550 1,700 4,500 3,400 $ 10,700 $ 40,500 38,000 450 500 150 $1,400 $8,750 $1,000 750 500 4,500 2,000 $8,750 Additional Data: a. Bought new equipment for $1,550 cash and sold existing equipment for $450 cash. The equipment that was sqd had cost $1,350 and had Accumulated Depreciation of $400 at the time of sale. b. Borrowed $1,200 cash from the bank during the year. c. Accounts Payable includes only purchases of services made on credit for operating purposes. Because there are no liability accounts relating to income tax, assume this expense was fully paid in cash

Heads Up Company was started several years ago by two hockey instructors. The company's comparative balance sheets and income statement follow, along with additional information. Balance Sheet at December 31 Cash Accounts Receivable Equipment Accumulated Depreciation-Equipment Total Assets Accounts Payable Salaries and Wages Payable Notes Payable (long-term) Connon Stock Retained Earnings Total Liabilities and Stockholders' Equity Income Statement Service Revenue Salaries and Wages Expense Depreciation Expense Loss on Disposal of Equipment Income Tax Expense Net Income Current Year Previous Year $ 3,800 1,650 4,500 (1,200) $6,400 850 4,700 (1,250) $ 10,700 $ 550 550 1,700 4,500 3,400 $ 10,700 $ 40,500 38,000 450 500 150 $1,400 $8,750 $1,000 750 500 4,500 2,000 $8,750 Additional Data: a. Bought new equipment for $1,550 cash and sold existing equipment for $450 cash. The equipment that was sqd had cost $1,350 and had Accumulated Depreciation of $400 at the time of sale. b. Borrowed $1,200 cash from the bank during the year. c. Accounts Payable includes only purchases of services made on credit for operating purposes. Because there are no liability accounts relating to income tax, assume this expense was fully paid in cash

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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