Presented here are

(a) the assets and liabilities of Gotcha Covered Security Systems at December 31,2007, 

(b) the revenues and expenses of the company for the year ended on that date.

The capital balance of Andrew Stryker, the owner, was \(\$ 150,000\) one year ago, at December 31, 2006. During 2007, Stryker withdrew \(\$ 40,000\) for personal use.

Requirements 

1. Prepare Gotcha Covered's income statement for the year ended December 31, 2007.

2. Prepare the statement of owner's equity for the year ended December 31, 2007.

3. Prepare the balance sheet at December 31, 2007.

4. Answer these questions about the company:

a. Was the result of operations for the year a profit or a loss? How much?

b. How much in total economic resources does the company have as it moves into the new year? How much does the company owe? What is the dollar amount of the owner's equity interest in the business at the end of the year?

Transcribed Image Text:

Land Note payable Property tax expense "Rent expense $ 60,000 Accounts payable 35,000 Accounts receivable 4,000 Advertising expense 23,000 uilding $ 19,000 13,000 12,000 131,000 Salary expense 63,000 Cash 14,000 Salary payable 1,000 Equipment 20,000 Service revenue 189,000 Insurance expense 2,000 Supplies 3,000 Interest expense 9,000