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
- Activity Based Costing - practice problem Fontillas Instrument, Inc. manufactures two products: missile range instruments and space pressure gauges. During April, 50 range instruments and 300 pressure gauges were produced, and overhead costs of $89,500 were estimated. An analysis of estimated overhead costs reveals the following activities. Activities 1. Materials handling 2. Machine setups Cost Drivers Number of requisitions Number of setups Total cost $35,000 27,500 3. Quality inspections Number of inspections 27,000 $89.500 The cost driver volume for each product was as follows: Cost Drivers Instruments Gauge Total Number of requisitions 400 600 1,000 Number of setups 200 300 500 Number of inspections 200 400 600 Insructions (a) Determine the overhead rate for each activity. (b) Assign the manufacturing overhead costs for April to the two products using activity-based costing.arrow_forwardBodhi Company has three cost pools and two doggie products (leashes and collars). The activity cost pool of ordering has the cost drive of purchase orders. The activity cost pool of assembly has a cost driver of parts. The activity cost pool of supervising has the cost driver of labor hours. The accumulated data relative to those cost drivers is as follows: Expected Use of Estimated Cost Drivers by Product Cost Drivers Overhead Leashes Collars Purchase orders $260,000 70,000 60,000 Parts 400,000 300,000 500,000 Labor hours 300,000 15,000 10,000 $960,000 Instructions: (a) Compute the activity-based overhead rates. (b) Compute the costs assigned to leashes and collars for each activity cost pool. (c) Compute the total costs assigned to each product.arrow_forwardTorre Corporation incurred the following transactions. 1. Purchased raw materials on account $46,300. 2. Raw Materials of $36,000 were requisitioned to the factory. An analysis of the materials requisition slips indicated that $6,800 was classified as indirect materials. 3. Factory labor costs incurred were $55,900, of which $51,000 pertained to factory wages payable and $4,900 pertained to employer payroll taxes payable. 4. Time tickets indicated that $50,000 was direct labor and $5,900 was indirect labor. 5. Overhead costs incurred on account were $80,500. 6. Manufacturing overhead was applied at the rate of 150% of direct labor cost. 7. Goods costing $88,000 were completed and transferred to finished goods. 8. Finished goods costing $75,000 to manufacture were sold on account for $103,000. Instructions Journalize the transactions.arrow_forward
- Chapter 15 Assignment of direct materials, direct labor and manufacturing overhead Stine Company uses a job order cost system. During May, a summary of source documents reveals the following. Job Number Materials Requisition Slips Labor Time Tickets 429 430 $2,500 3,500 $1,900 3,000 431 4,400 $10,400 7,600 $12,500 General use 800 1,200 $11,200 $13,700 Stine Company applies manufacturing overhead to jobs at an overhead rate of 60% of direct labor cost. Instructions Prepare summary journal entries to record (i) the requisition slips, (ii) the time tickets, (iii) the assignment of manufacturing overhead to jobs,arrow_forwardSolve accarrow_forwardSolve fastarrow_forward
- Assume that none of the fixed overhead can be avoided. However, if the robots are purchased from Tienh Inc., Crane 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 1A Fixed overhead Opportunity cost Purchase price Totals Make A Buy $ SA Net Income Increase (Decrease) $ Based on the above assumptions, indicate whether the offer should be accepted or rejected? The offerarrow_forwardThe following is a list of balances relating to Phiri Properties Ltd during 2024. The company maintains a memorandum debtors and creditors ledger in which the individual account of customers and suppliers are maintained. These were as follows: Debit balance in debtors account 01/01/2024 66,300 Credit balance in creditors account 01/01/2024 50,600 Sunday credit balance on debtors ledger Goods purchased on credit 724 257,919 Goods sold on credit Cash received from debtors Cash paid to suppliers Discount received Discount allowed Cash purchases Cash sales Bad Debts written off Interest on overdue account of customers 323,614 299,149 210,522 2,663 2,930 3,627 5,922 3,651 277 Returns outwards 2,926 Return inwards 2,805 Accounts settled by contra between debtors and creditors ledgers 1,106 Credit balances in debtors ledgers 31/12/2024. 815 Debit balances in creditors ledger 31/12/2024.698 Required: Prepare the debtors control account as at 31/12/2024. Prepare the creditors control account…arrow_forwardSolnarrow_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





