4\ 8.

00:34:54

\ 50:34.54\ eBook\ Upon graduation from high school, William Nitter accepted a job as a plumber's assistant for a large local plumbing company. After three years of hard work, William received a plumbing licence and decided to start his own business. He had saved

$31,000

, which he invested in the business. His lawyer had advised him to start as a corporation. First, he transferred the

$3,000

from his savings account to a business bank account for Willam's Plumbing Services Inc. and was issued shares. He then purchased a used panel truck for

$21,500

cash and second hand tools for

$3,700

, rented space in a small building, Inserted an advertisement in the local paper, and opened his business on July 1 of the current year. Immediately. William was very busy; after one month, he employed an assistant.\ Although William knew practically nothing about the financlal side of the business, he reallzed that a number of reports were required and that expenses and collections from clients had to be controlled carefully. At December 31 of the current year, prompted in part by concem about his income tax situation, William recognized the need for financial statements. His wife Jennifer developed some financial statements for the busines5. On December 31 , with the help of a friend, she gathered the following data for the six months just ended. Bank account deposits of collections for plumbing services totalled

$74,000

. The following cheques had been written: plumber's assistant, $17,700; payroll taxes,

$820

; oll, gas, and maintenance for the truck, $2,750; rent; $2, 850; supplies purchased and used on jobs, $17,800; utilties and telephone, $2,200; insurance,

$840

for the past six months; and iniscellaneous expenses fincluding advertising),

$1,180

. Also, uncoliected invoices to customers for plumbing services amounted to

$6.700

. The

$570

rent far December had not been paid. William estimated the cost of using the fruck and tools (depreciation) during the six miont average income tax rate for income from his business is 30 percent.\ Required:\ Prepare a statement of eamings for Willam's Plumbing Services inc, for the six months of July through December of the current year. Use the following main captions: Revenue from services, Expenses, Earnings before income taxes, and Net earnings\ Prax\ 4 of 4\ Next

Upon graduation from high school, William Nitter accepted a job as a plumber's assistant for a large local plumbing company. After three years of hard work, Whiam received a plumbing licence and decided to start his own business. He had saved $31,000 which he invested in the business. His lawryer had advised him to start as a corporation. First, he transferred the $31,000 from fis 5 avings account to a business bank account for Willam's. Plumbing Services Inc. and was issued shares. He then purchased a used panei truck for $21,500 cash and second hand tools for $3,700, rented space in a small building, Inserted an advertisement in the local paper, and opened his business on July 1 of the current year. Immediately. Willam was very busy; after one month, he empioyed an assistant: Although William knew practically nothing about the finaryclal side of the business, he realized that a number of reports were reguired and that expenses and collections from clients had to be controlled carefully. At December 31 of the current year, prompted in part by concern about his income tax situation. William recognized the need for financiai statements. His wife Jennfer developed some financial statements for the business. On December 31 with the help of a friend, she gathered the following data for the six months just ended. Bank account deposits of collections for plumbing services tolalled $77,000. The following cheques had been written: plumber's assistant, $17,700; payroll taxes, $820; oll, gas, and maintenance for the truck, $2,750; rent, $2,850; supplies purchased and used on jobs, $17,800; utilities and telephone, $2,200; insurance, $840 for the past six months; and miscellaneous experises (including advertising). $1,180. Also, uncoliected invoices to customers for plumbing services amounted to $6,700. The $570 rent for December had not been paid. Witiam estimated the cost of using the truck and tools (depreciation) during the six monthis to be $3,100. The average income tax rate for income from his business is 30 percent. Required: 1. Prepare a statement of eamings for Willam's Plumbing Services inc. for the six months of July through December of the current yeat Uke the following maln captions: Revenue fromi services, Expenses. Earnings before income taxes, and Net earnings