Concept Introduction:
Financial Statements: Financial statements are reports of the financial condition of a company or entity. In the financial statements, the management presents the financial performance and position of the company at a point in time. Financial statements disclose the financial effects of business transactions. Financial statements include a
Balance Sheet: The balance sheet provides details of the firm’s assets, liabilities and owner’s equity for a given date. The balance sheet gives a snapshot of what the company owns and owes as well as the amount invested in equity. The balance sheet follows the below rule
Assets = Liabilities + equity
Income Statement: It is also called the profit & loss statement. Income statement provides a snapshot of revenue, expenses and net income of the organization for a given period.
Statement of Cash Flows: It is a financial statement that shows the movements of cash and bank balance during a period. It describes the amount of cash generated by a company during a period and the use of the cash.
Statement of change in equity: It is a financial statement that shows the movements of equity capital during a period.
1.
To prepare: A table in required format for the given data

Explanation of Solution
The required table for the given data is prepared as below:
Assets | Liabilities | + | Equity | ||||||||||||
Date | Cash | + | + | Equipment | = | Account Payable | + | N. Niko Capital | - | N. Niko withdrawals | + | Revenues | - | Expenses | |
1 | $130,000 | $130,000 | |||||||||||||
2 | -6,000 | -6,000 | |||||||||||||
4 | 2,400 | 2,400 | |||||||||||||
6 | -1,150 | -1,150 | |||||||||||||
8 | 850 | 850 | |||||||||||||
14 | 7,500 | 7,500 | |||||||||||||
16 | -800 | -800 | |||||||||||||
20 | 7,500 | -7,500 | |||||||||||||
21 | 7,900 | 7,900 | |||||||||||||
24 | 675 | 675 | |||||||||||||
25 | 7,900 | -7,900 | |||||||||||||
26 | -2,400 | -2,400 | |||||||||||||
28 | -800 | -800 | |||||||||||||
29 | -4,000 | -4,000 | |||||||||||||
30 | -150 | -150 | |||||||||||||
30 | -890 | -890 | |||||||||||||
130,060 | + | 675 | + | 2,400 | = | 0 | + | 130,000 | - | -4,000 | + | 16,925 | - | -9,790 |
2.
To Prepare: The income statement, statement of owner’s equity and the balance sheet from the given data.

Explanation of Solution
The income statement for Niko’s Maintenance Co for June month is as below.
Niko’s Maintenance Co | |||
Income Statement for the month June | |||
Details | Amount in $ | ||
Revenue | |||
Income from maintain services | $16,925 | ||
Expenses | |||
Rent expenses | 6,000 | ||
Administrative expenses | 1,150 | ||
Salary expenses | 1,600 | ||
Telephone bill | 150 | ||
Utilities expenses | 890 | 9,790 | |
Net income | $7,135 |
The statement of owner’s equity for Niko’s Maintenance Co for the month of June is as below
Niko’s Maintenance Co | ||
Statement of owner’s equity for the month of June | ||
Details | Amount in $ | |
Opening equity | 0 | |
Add: Equity introduced in form of cash | 130,000 | |
Add: Net income for the year | 7,135 | |
Less: Cash withdrawals | -4,000 | |
Closing equity as on June 30 | $133,135 |
The balance sheet as of June 30 is as below.
Niko’s Maintenance Co | ||
Balance Sheet as on June 30 | ||
Details | Amount in $ | |
Liabilities | ||
Equity | $133,135 | |
Account payable | 0 | |
Total | $133,135 | |
Assets | ||
Cash | $130,060 | |
Account receivable | $675 | |
Equipments | $2,400 | |
Total | $133,135 |
3.
To Prepare: A statement of cash flows for the month of June.

Explanation of Solution
The statement of cash flows for the month of June is prepared as below.
Niko’s Maintenance Co | |||
Statement of Cash flow for the month of June | |||
Amount in $ | |||
Opening cash balance | 0 | ||
Cash flow from operating activities | |||
Rent paid in cash | -6,000 | ||
Advertising exp paid in cash | -1,150 | ||
Revenue received in cash | 850 | ||
Cash received from customer | 7,500 | ||
Cash received from customer | 7,900 | ||
Salary paid in cash | -1,600 | ||
Telephone bill paid in cash | -150 | ||
Utilities expenses paid in cash | -890 | 6460 | |
Cash flow from financing activities | |||
Cash paid to supplier of equipment | -2,400 | ||
Cash flow from investing activities | |||
Cash received from Owner | 130,000 | ||
Cash withdrawals by owner | -4,000 | 126,000 | |
Cash Balance as on June 30 | 130,060 |
Want to see more full solutions like this?
Chapter 1 Solutions
WORKING PAPERS F/ FUND ACCOUNTING
- Sharon Mars, a recent graduate of Bell's accounting program, evaluated the operating performance of Carla Vista Company's six divisions. Sharon made the following presentation to Carla Vista's board of directors and suggested the Percy Division be eliminated. "If the Percy Division is eliminated," she said, "our total profits would increase by $25,300." The Other Five Divisions Percy Division Total Sales $1,663,000 $100,900 $1,763,900 Cost of goods sold 978,400 76,500 1,054,900 Gross profit 684,600 24,400 709,000 Operating expenses 528,500 49,700 578,200 Net income $156,100 $(25,300 ) $130,800 In the Percy Division, cost of goods sold is $60,100 variable and $16,400 fixed, and operating expenses are $29,100 variable and $20,600 fixed. None of the Percy Division's fixed costs will be eliminated if the division is discontinued. Is Sharon right about eliminating the Percy Division? Prepare a schedule to support your answer. (Enter negative amounts using either a negative sign preceding…arrow_forwardhello tutor please help mearrow_forwardaccounting questionarrow_forward
- Mark purchased 200 shares of stock for $40 per share. During the year, he received $500 in dividends. He recently sold the stock for $55 per share. What was Mark's return on the stock? a) $3,500 b) $4,000 c) $3,900 d) $4,500arrow_forwardSummit Industries has a normal capacity of 30,000 direct labor hours. The company's variable costs are $42,000, and its fixed costs are $18,000 when running at normal capacity. What is the standard manufacturing overhead rate per unit? a) $1.50 b) $1.60 c) $2.00 d) $2.10arrow_forwardIvanhoe, Inc. has recently started the manufacture of Tri-Robo, a three-wheeled robot that can scan a home for fires and gas leaks and then transmit this information to a smartphone. The cost structure to manufacture 20,400 Tri-Robos is as follows. Cost Direct materials ($51 per robot) $1,040,400 Direct labor ($39 per robot) 795,600 Variable overhead ($7 per robot) 142,800 Allocated fixed overhead ($29 per robot) 591,600 Total $2,570,400 Ivanhoe is approached by Tienh Inc., which offers to make Tri-Robo for $116 per unit or $2,366,400. Following are independent assumptions. Assume that none of the fixed overhead can be avoided. However, if the robots are purchased from Tienh Inc., Ivanhoe can use the released productive resources to generate additional income of $375,000. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) Direct materials Direct labor Variable overhead Fixed overhead Opportunity cost Purchase price Totals Make…arrow_forward
- correct answer pleasearrow_forwardcost accountingarrow_forwardSummit Holdings has $280,000 in accounts receivable that will be collected within 70 days. The company needs cash urgently and decides to factor them, receiving $260,000. Skyline Factoring Company, which took the receivables, collected $275,000 after 85 days. Find the rate of return on this investment for Skyline.arrow_forward
- AccountingAccountingISBN:9781337272094Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.Publisher:Cengage Learning,Accounting Information SystemsAccountingISBN:9781337619202Author:Hall, James A.Publisher:Cengage Learning,
- Horngren's Cost Accounting: A Managerial Emphasis...AccountingISBN:9780134475585Author:Srikant M. Datar, Madhav V. RajanPublisher:PEARSONIntermediate AccountingAccountingISBN:9781259722660Author:J. David Spiceland, Mark W. Nelson, Wayne M ThomasPublisher:McGraw-Hill EducationFinancial and Managerial AccountingAccountingISBN:9781259726705Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting PrinciplesPublisher:McGraw-Hill Education





