Problem 3-5B Preparing financial statements from the adjusted trial balance and computing profit margin P6 A1 The adjusted trial balance for Speedy Courier as of December 31 follows. Debit Credit Cash......................................... $ 58,000 Accounts receivable ............................ 120,000 Interest receivable.............................. 7,000 Notes receivable (due in 90 days} ................. 210,000 Office supplies................................. 22,000 Trucks........................................134,000 Accumulated depreciation -Trucks ................ $ 58.000 Equipment.................................... 270,000 Accumulated depreciation-Equipment............. 200,000 Land......................................... 100,000 Accounts payable .............................. 134.000 Interest payable................................ 20,000 Salaries payable ............................... 28,000 Unearned delivery fees.......................... 120,000 Long-term notes payable ........................ 200,000 L. Horace, Capital .............................. 125,000 L Horace. Withdrawals.......................... 50,000 Delivery fees earned............................ 611,8O0 Interest earned ................................ 34,000 Depreciation expense—Trucks.................... 29,000 Depreciation expense—Equipment ................ 48,000 Salaries expense............................... 74,000 Wages expense................................ 300,000 Interest expense ............................... 15,000 Office supplies expense ......................... 31,000 Advertising expense ............................ 27,200 Repairs expense—Trucks ........................ 35,600 - T o t a l s ......................................... $1,530,800 $1,530,800 Required 1. Use the information in the adjusted trial balance to prepare (a) the income statement for the year ended December 31; (6) the statement of owner's equity for the year ended December 31 [Note: L. Horace, Capital at Dec. 31 of year was S125 : 000]; and (c) the balance sheet as of December 31. 2. Compute the profit margin for the year (use total revenues as the denominator).

Question

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Answer 1

Textbook Question

Chapter 3, Problem 5BPSB

Problem 3-5B Preparing financial statements from the adjusted trial balance and computing profit margin P6 A1 The adjusted trial balance for Speedy Courier as of December 31 follows.

Debit Credit

Cash......................................... $ 58,000
Accounts receivable ............................ 120,000
Interest receivable.............................. 7,000
Notes receivable (due in 90 days} ................. 210,000
Office supplies................................. 22,000
Trucks........................................134,000
Accumulated depreciation-Trucks ................ $ 58.000
Equipment.................................... 270,000
Accumulated depreciation-Equipment............. 200,000
Land......................................... 100,000
Accounts payable .............................. 134.000
Interest payable................................ 20,000
Salaries payable ............................... 28,000
Unearned delivery fees.......................... 120,000
Long-term notes payable ........................ 200,000
L. Horace, Capital .............................. 125,000
L Horace. Withdrawals.......................... 50,000
Delivery fees earned............................ 611,8O0
Interest earned ................................ 34,000
Depreciation expense—Trucks.................... 29,000
Depreciation expense—Equipment ................ 48,000
Salaries expense............................... 74,000
Wages expense................................ 300,000
Interest expense ............................... 15,000
Office supplies expense ......................... 31,000
Advertising expense ............................ 27,200
Repairs expense—Trucks ........................ 35,600 -
_T_o_t_a_l_s......................................... $1,530,800 $1,530,800

Required

1. Use the information in the adjusted trial balance to prepare (a) the income statement for the year ended December 31; (6) the statement of owner's equity for the year ended December 31 [Note: L. Horace, Capital at Dec. 31 of year was S125_:000]; and (c) the balance sheet as of December 31.
2. Compute the profit margin for the year (use total revenues as the denominator).

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

Expert Solution

To determine

Introduction:

Income statement gives a picture of the financial performance of the company during the year and it forms a part of the financial statements.

Owner's equity is a statement which provides the owner's capital balance by determining the amount of investment, income transferred, and drawings.

The balance sheet is the financial statement which helps the investors to know te overall picture of the company showing the summarized assets, liabilities, and equity held by the shareholders during the year.

To Prepare:

The financial statement i.e. income statement, statement of owner's equity and balance sheet as of December, 31.

Answer to Problem 5BPSB

The financial statement refers to the income statement, owner's equity and balance sheet which are drawn here.

Explanation of Solution

Adjusted trial balances are given.

Hence:

(a) Income Statement is as follows:

Speedy Courier
Income Statement
For Year Ended December 31
Particulars	Amount ($)	Amount ($)
Revenue:
Delivery fees earned		611,800
Interest earned		34,000
Total revenues (A)		645,800
Expenses:
Depreciation expense-Trucks	29,000
Depreciation expense-Equipment	48,000
Salaries expense	74,000
Wages expense	300,000
Interest expense	15,000
Office supplies expense	31,000
Advertising expense	27,200
Repair expense-Automobiles	35,600
Total Expenses(B)		559,800
Net income (A-B)		$86,000

(b) Statement of owner's equity is as follows:

Speedy Courier
Statement of Owner's Equity
For Year Ended December 31
Particulars	Amount ($)
Owner's equity, December 31 of the prior year	125,000
Add: Net Income	86,000
	211,000
Less: Withdrawals	50,000
Owner's equity, December 31 of the current year	$161,000

(c) Balance Sheet is as follows:

Speedy Courier
Balance Sheet
as on December 31
Assets	Amount ($)	Amount ($)
Cash		58,000
Account receivable		120,000
Interest receivable		7,000
Notes receivable		210,000
Office supplies		22,000
Automobiles	134,000
Accumulated depreciation-Automobiles	58,000	76,000
Office equipment	270,000
Accumulated depreciation-Office equipment	(200,000)	70,000
Land		100,000
Total assets		$663,000

Liabilities & Equity
Liabilities
Account payable	134,000
Interest payable	20,000
Salaries payable	28,000
Unearned consulting fees	120,000
Long-term notes payable	200,000
Total Liabilities		502,000

Owner's equity		161,000

Total liabilities and equity		$663,000

Conclusion:

Thus, these are the income statement, owner's equity statement, and balance sheet of Speedy Courier.

Expert Solution

To determine

Introduction:

Profit Margin is the ratio which is a useful measure to calculate the company's operating results. In other words, it is a ratio of its net income to its net sales.

To calculate:

The profit margin for the year.

Answer to Problem 5BPSB

The profit margin of Speedy Courier for the year ended on December 31 : 13.3%

Explanation of Solution

Adjusted trial balances are given

Hence, the ratio of Profit margin is computed as follows:

Net Income

Total Revenue

= $86,000

$645,800

= 13.3%

Conclusion:

Thus, the profit margin of Speedy Courier is 13.3% .

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Answer 2

Textbook Question

Chapter 3, Problem 5BPSB

Problem 3-5B Preparing financial statements from the adjusted trial balance and computing profit margin P6 A1 The adjusted trial balance for Speedy Courier as of December 31 follows.

Debit Credit

Cash......................................... $ 58,000
Accounts receivable ............................ 120,000
Interest receivable.............................. 7,000
Notes receivable (due in 90 days} ................. 210,000
Office supplies................................. 22,000
Trucks........................................134,000
Accumulated depreciation-Trucks ................ $ 58.000
Equipment.................................... 270,000
Accumulated depreciation-Equipment............. 200,000
Land......................................... 100,000
Accounts payable .............................. 134.000
Interest payable................................ 20,000
Salaries payable ............................... 28,000
Unearned delivery fees.......................... 120,000
Long-term notes payable ........................ 200,000
L. Horace, Capital .............................. 125,000
L Horace. Withdrawals.......................... 50,000
Delivery fees earned............................ 611,8O0
Interest earned ................................ 34,000
Depreciation expense—Trucks.................... 29,000
Depreciation expense—Equipment ................ 48,000
Salaries expense............................... 74,000
Wages expense................................ 300,000
Interest expense ............................... 15,000
Office supplies expense ......................... 31,000
Advertising expense ............................ 27,200
Repairs expense—Trucks ........................ 35,600 -
_T_o_t_a_l_s......................................... $1,530,800 $1,530,800

Required

1. Use the information in the adjusted trial balance to prepare (a) the income statement for the year ended December 31; (6) the statement of owner's equity for the year ended December 31 [Note: L. Horace, Capital at Dec. 31 of year was S125_:000]; and (c) the balance sheet as of December 31.
2. Compute the profit margin for the year (use total revenues as the denominator).

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

Expert Solution

To determine

Introduction:

Income statement gives a picture of the financial performance of the company during the year and it forms a part of the financial statements.

Owner's equity is a statement which provides the owner's capital balance by determining the amount of investment, income transferred, and drawings.

The balance sheet is the financial statement which helps the investors to know te overall picture of the company showing the summarized assets, liabilities, and equity held by the shareholders during the year.

To Prepare:

The financial statement i.e. income statement, statement of owner's equity and balance sheet as of December, 31.

Answer to Problem 5BPSB

The financial statement refers to the income statement, owner's equity and balance sheet which are drawn here.

Explanation of Solution

Adjusted trial balances are given.

Hence:

(a) Income Statement is as follows:

Speedy Courier
Income Statement
For Year Ended December 31
Particulars	Amount ($)	Amount ($)
Revenue:
Delivery fees earned		611,800
Interest earned		34,000
Total revenues (A)		645,800
Expenses:
Depreciation expense-Trucks	29,000
Depreciation expense-Equipment	48,000
Salaries expense	74,000
Wages expense	300,000
Interest expense	15,000
Office supplies expense	31,000
Advertising expense	27,200
Repair expense-Automobiles	35,600
Total Expenses(B)		559,800
Net income (A-B)		$86,000

(b) Statement of owner's equity is as follows:

Speedy Courier
Statement of Owner's Equity
For Year Ended December 31
Particulars	Amount ($)
Owner's equity, December 31 of the prior year	125,000
Add: Net Income	86,000
	211,000
Less: Withdrawals	50,000
Owner's equity, December 31 of the current year	$161,000

(c) Balance Sheet is as follows:

Speedy Courier
Balance Sheet
as on December 31
Assets	Amount ($)	Amount ($)
Cash		58,000
Account receivable		120,000
Interest receivable		7,000
Notes receivable		210,000
Office supplies		22,000
Automobiles	134,000
Accumulated depreciation-Automobiles	58,000	76,000
Office equipment	270,000
Accumulated depreciation-Office equipment	(200,000)	70,000
Land		100,000
Total assets		$663,000

Liabilities & Equity
Liabilities
Account payable	134,000
Interest payable	20,000
Salaries payable	28,000
Unearned consulting fees	120,000
Long-term notes payable	200,000
Total Liabilities		502,000

Owner's equity		161,000

Total liabilities and equity		$663,000

Conclusion:

Thus, these are the income statement, owner's equity statement, and balance sheet of Speedy Courier.

Expert Solution

To determine

Introduction:

Profit Margin is the ratio which is a useful measure to calculate the company's operating results. In other words, it is a ratio of its net income to its net sales.

To calculate:

The profit margin for the year.

Answer to Problem 5BPSB

The profit margin of Speedy Courier for the year ended on December 31 : 13.3%

Explanation of Solution

Adjusted trial balances are given

Hence, the ratio of Profit margin is computed as follows:

Net Income

Total Revenue

= $86,000

$645,800

= 13.3%

Conclusion:

Thus, the profit margin of Speedy Courier is 13.3% .

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Answer 3

Textbook Question

Chapter 3, Problem 5BPSB

Problem 3-5B Preparing financial statements from the adjusted trial balance and computing profit margin P6 A1 The adjusted trial balance for Speedy Courier as of December 31 follows.

Debit Credit

Cash......................................... $ 58,000
Accounts receivable ............................ 120,000
Interest receivable.............................. 7,000
Notes receivable (due in 90 days} ................. 210,000
Office supplies................................. 22,000
Trucks........................................134,000
Accumulated depreciation-Trucks ................ $ 58.000
Equipment.................................... 270,000
Accumulated depreciation-Equipment............. 200,000
Land......................................... 100,000
Accounts payable .............................. 134.000
Interest payable................................ 20,000
Salaries payable ............................... 28,000
Unearned delivery fees.......................... 120,000
Long-term notes payable ........................ 200,000
L. Horace, Capital .............................. 125,000
L Horace. Withdrawals.......................... 50,000
Delivery fees earned............................ 611,8O0
Interest earned ................................ 34,000
Depreciation expense—Trucks.................... 29,000
Depreciation expense—Equipment ................ 48,000
Salaries expense............................... 74,000
Wages expense................................ 300,000
Interest expense ............................... 15,000
Office supplies expense ......................... 31,000
Advertising expense ............................ 27,200
Repairs expense—Trucks ........................ 35,600 -
_T_o_t_a_l_s......................................... $1,530,800 $1,530,800

Required

1. Use the information in the adjusted trial balance to prepare (a) the income statement for the year ended December 31; (6) the statement of owner's equity for the year ended December 31 [Note: L. Horace, Capital at Dec. 31 of year was S125_:000]; and (c) the balance sheet as of December 31.
2. Compute the profit margin for the year (use total revenues as the denominator).

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

Expert Solution

To determine

Introduction:

Income statement gives a picture of the financial performance of the company during the year and it forms a part of the financial statements.

Owner's equity is a statement which provides the owner's capital balance by determining the amount of investment, income transferred, and drawings.

The balance sheet is the financial statement which helps the investors to know te overall picture of the company showing the summarized assets, liabilities, and equity held by the shareholders during the year.

To Prepare:

The financial statement i.e. income statement, statement of owner's equity and balance sheet as of December, 31.

Answer to Problem 5BPSB

The financial statement refers to the income statement, owner's equity and balance sheet which are drawn here.

Explanation of Solution

Adjusted trial balances are given.

Hence:

(a) Income Statement is as follows:

Speedy Courier
Income Statement
For Year Ended December 31
Particulars	Amount ($)	Amount ($)
Revenue:
Delivery fees earned		611,800
Interest earned		34,000
Total revenues (A)		645,800
Expenses:
Depreciation expense-Trucks	29,000
Depreciation expense-Equipment	48,000
Salaries expense	74,000
Wages expense	300,000
Interest expense	15,000
Office supplies expense	31,000
Advertising expense	27,200
Repair expense-Automobiles	35,600
Total Expenses(B)		559,800
Net income (A-B)		$86,000

(b) Statement of owner's equity is as follows:

Speedy Courier
Statement of Owner's Equity
For Year Ended December 31
Particulars	Amount ($)
Owner's equity, December 31 of the prior year	125,000
Add: Net Income	86,000
	211,000
Less: Withdrawals	50,000
Owner's equity, December 31 of the current year	$161,000

(c) Balance Sheet is as follows:

Speedy Courier
Balance Sheet
as on December 31
Assets	Amount ($)	Amount ($)
Cash		58,000
Account receivable		120,000
Interest receivable		7,000
Notes receivable		210,000
Office supplies		22,000
Automobiles	134,000
Accumulated depreciation-Automobiles	58,000	76,000
Office equipment	270,000
Accumulated depreciation-Office equipment	(200,000)	70,000
Land		100,000
Total assets		$663,000

Liabilities & Equity
Liabilities
Account payable	134,000
Interest payable	20,000
Salaries payable	28,000
Unearned consulting fees	120,000
Long-term notes payable	200,000
Total Liabilities		502,000

Owner's equity		161,000

Total liabilities and equity		$663,000

Conclusion:

Thus, these are the income statement, owner's equity statement, and balance sheet of Speedy Courier.

Expert Solution

To determine

Introduction:

Profit Margin is the ratio which is a useful measure to calculate the company's operating results. In other words, it is a ratio of its net income to its net sales.

To calculate:

The profit margin for the year.

Answer to Problem 5BPSB

The profit margin of Speedy Courier for the year ended on December 31 : 13.3%

Explanation of Solution

Adjusted trial balances are given

Hence, the ratio of Profit margin is computed as follows:

Net Income

Total Revenue

= $86,000

$645,800

= 13.3%

Conclusion:

Thus, the profit margin of Speedy Courier is 13.3% .

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Answer 4

Textbook Question

Chapter 3, Problem 5BPSB

Problem 3-5B Preparing financial statements from the adjusted trial balance and computing profit margin P6 A1 The adjusted trial balance for Speedy Courier as of December 31 follows.

Debit Credit

Cash......................................... $ 58,000
Accounts receivable ............................ 120,000
Interest receivable.............................. 7,000
Notes receivable (due in 90 days} ................. 210,000
Office supplies................................. 22,000
Trucks........................................134,000
Accumulated depreciation-Trucks ................ $ 58.000
Equipment.................................... 270,000
Accumulated depreciation-Equipment............. 200,000
Land......................................... 100,000
Accounts payable .............................. 134.000
Interest payable................................ 20,000
Salaries payable ............................... 28,000
Unearned delivery fees.......................... 120,000
Long-term notes payable ........................ 200,000
L. Horace, Capital .............................. 125,000
L Horace. Withdrawals.......................... 50,000
Delivery fees earned............................ 611,8O0
Interest earned ................................ 34,000
Depreciation expense—Trucks.................... 29,000
Depreciation expense—Equipment ................ 48,000
Salaries expense............................... 74,000
Wages expense................................ 300,000
Interest expense ............................... 15,000
Office supplies expense ......................... 31,000
Advertising expense ............................ 27,200
Repairs expense—Trucks ........................ 35,600 -
_T_o_t_a_l_s......................................... $1,530,800 $1,530,800

Required

1. Use the information in the adjusted trial balance to prepare (a) the income statement for the year ended December 31; (6) the statement of owner's equity for the year ended December 31 [Note: L. Horace, Capital at Dec. 31 of year was S125_:000]; and (c) the balance sheet as of December 31.
2. Compute the profit margin for the year (use total revenues as the denominator).

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

Expert Solution

To determine

Introduction:

Income statement gives a picture of the financial performance of the company during the year and it forms a part of the financial statements.

Owner's equity is a statement which provides the owner's capital balance by determining the amount of investment, income transferred, and drawings.

The balance sheet is the financial statement which helps the investors to know te overall picture of the company showing the summarized assets, liabilities, and equity held by the shareholders during the year.

To Prepare:

The financial statement i.e. income statement, statement of owner's equity and balance sheet as of December, 31.

Answer to Problem 5BPSB

The financial statement refers to the income statement, owner's equity and balance sheet which are drawn here.

Explanation of Solution

Adjusted trial balances are given.

Hence:

(a) Income Statement is as follows:

Speedy Courier
Income Statement
For Year Ended December 31
Particulars	Amount ($)	Amount ($)
Revenue:
Delivery fees earned		611,800
Interest earned		34,000
Total revenues (A)		645,800
Expenses:
Depreciation expense-Trucks	29,000
Depreciation expense-Equipment	48,000
Salaries expense	74,000
Wages expense	300,000
Interest expense	15,000
Office supplies expense	31,000
Advertising expense	27,200
Repair expense-Automobiles	35,600
Total Expenses(B)		559,800
Net income (A-B)		$86,000

(b) Statement of owner's equity is as follows:

Speedy Courier
Statement of Owner's Equity
For Year Ended December 31
Particulars	Amount ($)
Owner's equity, December 31 of the prior year	125,000
Add: Net Income	86,000
	211,000
Less: Withdrawals	50,000
Owner's equity, December 31 of the current year	$161,000

(c) Balance Sheet is as follows:

Speedy Courier
Balance Sheet
as on December 31
Assets	Amount ($)	Amount ($)
Cash		58,000
Account receivable		120,000
Interest receivable		7,000
Notes receivable		210,000
Office supplies		22,000
Automobiles	134,000
Accumulated depreciation-Automobiles	58,000	76,000
Office equipment	270,000
Accumulated depreciation-Office equipment	(200,000)	70,000
Land		100,000
Total assets		$663,000

Liabilities & Equity
Liabilities
Account payable	134,000
Interest payable	20,000
Salaries payable	28,000
Unearned consulting fees	120,000
Long-term notes payable	200,000
Total Liabilities		502,000

Owner's equity		161,000

Total liabilities and equity		$663,000

Conclusion:

Thus, these are the income statement, owner's equity statement, and balance sheet of Speedy Courier.

Expert Solution

To determine

Introduction:

Profit Margin is the ratio which is a useful measure to calculate the company's operating results. In other words, it is a ratio of its net income to its net sales.

To calculate:

The profit margin for the year.

Answer to Problem 5BPSB

The profit margin of Speedy Courier for the year ended on December 31 : 13.3%

Explanation of Solution

Adjusted trial balances are given

Hence, the ratio of Profit margin is computed as follows:

Net Income

Total Revenue

= $86,000

$645,800

= 13.3%

Conclusion:

Thus, the profit margin of Speedy Courier is 13.3% .

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Answer 5

Textbook Question

Answer 6

Textbook Question

Answer 7

Expert Solution

To determine

Introduction:

Income statement gives a picture of the financial performance of the company during the year and it forms a part of the financial statements.

Owner's equity is a statement which provides the owner's capital balance by determining the amount of investment, income transferred, and drawings.

The balance sheet is the financial statement which helps the investors to know te overall picture of the company showing the summarized assets, liabilities, and equity held by the shareholders during the year.

To Prepare:

The financial statement i.e. income statement, statement of owner's equity and balance sheet as of December, 31.

Answer to Problem 5BPSB

The financial statement refers to the income statement, owner's equity and balance sheet which are drawn here.

Explanation of Solution

Adjusted trial balances are given.

Hence:

(a) Income Statement is as follows:

Speedy Courier
Income Statement
For Year Ended December 31
Particulars	Amount ($)	Amount ($)
Revenue:
Delivery fees earned		611,800
Interest earned		34,000
Total revenues (A)		645,800
Expenses:
Depreciation expense-Trucks	29,000
Depreciation expense-Equipment	48,000
Salaries expense	74,000
Wages expense	300,000
Interest expense	15,000
Office supplies expense	31,000
Advertising expense	27,200
Repair expense-Automobiles	35,600
Total Expenses(B)		559,800
Net income (A-B)		$86,000

(b) Statement of owner's equity is as follows:

Speedy Courier
Statement of Owner's Equity
For Year Ended December 31
Particulars	Amount ($)
Owner's equity, December 31 of the prior year	125,000
Add: Net Income	86,000
	211,000
Less: Withdrawals	50,000
Owner's equity, December 31 of the current year	$161,000

(c) Balance Sheet is as follows:

Speedy Courier
Balance Sheet
as on December 31
Assets	Amount ($)	Amount ($)
Cash		58,000
Account receivable		120,000
Interest receivable		7,000
Notes receivable		210,000
Office supplies		22,000
Automobiles	134,000
Accumulated depreciation-Automobiles	58,000	76,000
Office equipment	270,000
Accumulated depreciation-Office equipment	(200,000)	70,000
Land		100,000
Total assets		$663,000

Liabilities & Equity
Liabilities
Account payable	134,000
Interest payable	20,000
Salaries payable	28,000
Unearned consulting fees	120,000
Long-term notes payable	200,000
Total Liabilities		502,000

Owner's equity		161,000

Total liabilities and equity		$663,000

Conclusion:

Thus, these are the income statement, owner's equity statement, and balance sheet of Speedy Courier.

Expert Solution

To determine

Introduction:

Profit Margin is the ratio which is a useful measure to calculate the company's operating results. In other words, it is a ratio of its net income to its net sales.

To calculate:

The profit margin for the year.

Answer to Problem 5BPSB

The profit margin of Speedy Courier for the year ended on December 31 : 13.3%

Explanation of Solution

Adjusted trial balances are given

Hence, the ratio of Profit margin is computed as follows:

Net Income

Total Revenue

= $86,000

$645,800

= 13.3%

Conclusion:

Thus, the profit margin of Speedy Courier is 13.3% .

Answer 8

Expert Solution

To determine

Introduction:

Income statement gives a picture of the financial performance of the company during the year and it forms a part of the financial statements.

Owner's equity is a statement which provides the owner's capital balance by determining the amount of investment, income transferred, and drawings.

The balance sheet is the financial statement which helps the investors to know te overall picture of the company showing the summarized assets, liabilities, and equity held by the shareholders during the year.

To Prepare:

The financial statement i.e. income statement, statement of owner's equity and balance sheet as of December, 31.

Answer to Problem 5BPSB

The financial statement refers to the income statement, owner's equity and balance sheet which are drawn here.

Explanation of Solution

Adjusted trial balances are given.

Hence:

(a) Income Statement is as follows:

Speedy Courier
Income Statement
For Year Ended December 31
Particulars	Amount ($)	Amount ($)
Revenue:
Delivery fees earned		611,800
Interest earned		34,000
Total revenues (A)		645,800
Expenses:
Depreciation expense-Trucks	29,000
Depreciation expense-Equipment	48,000
Salaries expense	74,000
Wages expense	300,000
Interest expense	15,000
Office supplies expense	31,000
Advertising expense	27,200
Repair expense-Automobiles	35,600
Total Expenses(B)		559,800
Net income (A-B)		$86,000

(b) Statement of owner's equity is as follows:

Speedy Courier
Statement of Owner's Equity
For Year Ended December 31
Particulars	Amount ($)
Owner's equity, December 31 of the prior year	125,000
Add: Net Income	86,000
	211,000
Less: Withdrawals	50,000
Owner's equity, December 31 of the current year	$161,000

(c) Balance Sheet is as follows:

Speedy Courier
Balance Sheet
as on December 31
Assets	Amount ($)	Amount ($)
Cash		58,000
Account receivable		120,000
Interest receivable		7,000
Notes receivable		210,000
Office supplies		22,000
Automobiles	134,000
Accumulated depreciation-Automobiles	58,000	76,000
Office equipment	270,000
Accumulated depreciation-Office equipment	(200,000)	70,000
Land		100,000
Total assets		$663,000

Liabilities & Equity
Liabilities
Account payable	134,000
Interest payable	20,000
Salaries payable	28,000
Unearned consulting fees	120,000
Long-term notes payable	200,000
Total Liabilities		502,000

Owner's equity		161,000

Total liabilities and equity		$663,000

Conclusion:

Thus, these are the income statement, owner's equity statement, and balance sheet of Speedy Courier.

Answer 9

Expert Solution

Answer 10

Expert Solution

Answer 11

Expert Solution

Answer 12

To determine

Introduction:

Income statement gives a picture of the financial performance of the company during the year and it forms a part of the financial statements.

Owner's equity is a statement which provides the owner's capital balance by determining the amount of investment, income transferred, and drawings.

The balance sheet is the financial statement which helps the investors to know te overall picture of the company showing the summarized assets, liabilities, and equity held by the shareholders during the year.

To Prepare:

The financial statement i.e. income statement, statement of owner's equity and balance sheet as of December, 31.

Answer 13

Answer to Problem 5BPSB

The financial statement refers to the income statement, owner's equity and balance sheet which are drawn here.

Answer 14

Explanation of Solution

Adjusted trial balances are given.

Hence:

(a) Income Statement is as follows:

Speedy Courier
Income Statement
For Year Ended December 31
Particulars	Amount ($)	Amount ($)
Revenue:
Delivery fees earned		611,800
Interest earned		34,000
Total revenues (A)		645,800
Expenses:
Depreciation expense-Trucks	29,000
Depreciation expense-Equipment	48,000
Salaries expense	74,000
Wages expense	300,000
Interest expense	15,000
Office supplies expense	31,000
Advertising expense	27,200
Repair expense-Automobiles	35,600
Total Expenses(B)		559,800
Net income (A-B)		$86,000

(b) Statement of owner's equity is as follows:

Speedy Courier
Statement of Owner's Equity
For Year Ended December 31
Particulars	Amount ($)
Owner's equity, December 31 of the prior year	125,000
Add: Net Income	86,000
	211,000
Less: Withdrawals	50,000
Owner's equity, December 31 of the current year	$161,000

(c) Balance Sheet is as follows:

Speedy Courier
Balance Sheet
as on December 31
Assets	Amount ($)	Amount ($)
Cash		58,000
Account receivable		120,000
Interest receivable		7,000
Notes receivable		210,000
Office supplies		22,000
Automobiles	134,000
Accumulated depreciation-Automobiles	58,000	76,000
Office equipment	270,000
Accumulated depreciation-Office equipment	(200,000)	70,000
Land		100,000
Total assets		$663,000

Liabilities & Equity
Liabilities
Account payable	134,000
Interest payable	20,000
Salaries payable	28,000
Unearned consulting fees	120,000
Long-term notes payable	200,000
Total Liabilities		502,000

Owner's equity		161,000

Total liabilities and equity		$663,000

Conclusion:

Thus, these are the income statement, owner's equity statement, and balance sheet of Speedy Courier.

Answer 15

Expert Solution

To determine

Introduction:

Profit Margin is the ratio which is a useful measure to calculate the company's operating results. In other words, it is a ratio of its net income to its net sales.

To calculate:

The profit margin for the year.

Answer to Problem 5BPSB

The profit margin of Speedy Courier for the year ended on December 31 : 13.3%

Explanation of Solution

Adjusted trial balances are given

Hence, the ratio of Profit margin is computed as follows:

Net Income

Total Revenue

= $86,000

$645,800

= 13.3%

Conclusion:

Thus, the profit margin of Speedy Courier is 13.3% .

Answer 16

Expert Solution

Answer 17

Expert Solution

Answer 18

Expert Solution

Answer 19

To determine

Introduction:

Profit Margin is the ratio which is a useful measure to calculate the company's operating results. In other words, it is a ratio of its net income to its net sales.

To calculate:

The profit margin for the year.