The assets and liabilities of Hercules Inc. as of December 31,2019, and revenues and expenses for the year ended on that date follow: Land $98,000 Property tax expense $5,000 Note payable (due 2025) 95,000 Accounts receivable 25,000 Accounts payable 21,000 Advertising expense 10,000 Rent expense 3,000 Building 140,000 Cash 10,000 Salary expense 85,000 Common shares 75,000 Salary payable 12,000 Furniture 20,000 Service revenue 200,000 Interest expense 4,000 Supplies 3,000 Beginning retained earnings were $50,000, and dividends totalled $50,000 for the year. Required Prepare in good form a statement of earnings (income statement) of Hercules Inc. for the year ended December 31, 2019. Question 4 (continued) Prepare in good form a statement of retained earnings of Hercules Inc. for the year ended December 31, 2019. Calculate the following for Hercules at December 31, 2019 : Current Assets :________________________________________________________ Total Assets :__________________________________________________________ Total Liabilities :________________________________________________________ Total Shareholders’ equity: ________________________________________________
The assets and liabilities of Hercules Inc. as of December 31,2019, and revenues and expenses for the year ended on that date follow:
|
Land $98,000 |
Property tax expense $5,000 |
|
Note payable (due 2025) 95,000 |
|
|
Accounts payable 21,000 |
Advertising expense 10,000 |
|
Rent expense 3,000 |
Building 140,000 |
|
Cash 10,000 |
Salary expense 85,000 |
|
Common shares 75,000 |
Salary payable 12,000 |
|
Furniture 20,000 |
Service revenue 200,000 |
|
Interest expense 4,000 |
Supplies 3,000 |
Beginning
Required
- Prepare in good form a statement of earnings (income statement) of Hercules Inc. for the year ended December 31, 2019.
Question 4 (continued)
- Prepare in good form a statement of retained earnings of Hercules Inc. for the year ended December 31, 2019.
- Calculate the following for Hercules at December 31, 2019 :
Current Assets :________________________________________________________
Total Assets :__________________________________________________________
Total Liabilities :________________________________________________________
Total Shareholders’ equity: ________________________________________________
- Analyze Hercules Inc. by answering these questions :
- Was Hercules Inc. profitable during 2019? By how much?
_____________________________________________________________________
_____________________________________________________________________
- Who owns more of Hercules Inc.’s assets, the creditors or the shareholders? _____________________________________________________________________
Why?
_____________________________________________________________________
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