E3-17 Inferring Operating Transactions and Preparing an Income Statement and Balance Sheet LO3-2, 3-3, 3-4, 3-5 Kate's Kite Company (a corporation) sells and repairs kites from manufacturers around the world. Its stores are located in rented space in malls and shopping centers. During its first month of operations ended April 30, Kate's Kite Company completed eight transactions with the dollar effects indicated in the following schedule: Ending Balance Accounts Cash Accounts Receivable Inventory Prepaid Expenses Store Fixtures Accounts Payable Unearned Revenue Common Stock ($1 par value) Additional Paid-in Capital Sales Revenue Cost of Sales Wages Expense Rent Expense Utilities Expense DOLLAR EFFECT OF EACH OF THE EIGHT TRANSACTIONS (a) (b) (c) (d) (e) (f) (g) (h) $ 63,500 $(13,000) $ (6,100) $ 8,680 $ (1,200) $ (2,360) $ 3,890 5,720 25,700 (5,910) 1,770 13,000 19,600 $1,360 2,450 9,525 53,975 14,400 1,440 5,910 1,200 590 1,360 Required: 2. Compute the ending balance in each account and prepare an income statement and a classified balance sheet for Kate's Kite Company on April 30. KATE'S KITE COMPANY Income Statement Expenses: Total expenses KATE'S KITE COMPANY Balance Sheet Assets Liabilities and Shareholders' Equity Current Assets: Current Liabilities: Total current assets Total current liabilities Shareholders' Equity: Total shareholders' equity Total Liabilities & Shareholders' Equity Total Assets