eBook Problem-Solving Strategy

Financial Statements

The amounts of the assets and liabilities of New World Travel Agency at December 31, 2014, the end of the current year, and its revenue and expenses for the year are listed below. The capital of Kris Taber, owner, was $58,560 at January 1, 2014, the beginning of the current year, and the owner withdrew $28,700 during the current year.

Accounts payable $19,740

Accounts receivable 105,670

Cash 213,310

Fees earned 770,500

Miscellaneous expense 6,310

Rent expense 105,180

Supplies 9,190

Supplies expense 16,830

Utilities expense 63,110

Wages expense 300,500

Required:

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1. Prepare an income statement for the current year ended December 31, 2014.

New World Travel Agency

Income Statement

For the Year Ended December 31, 2014

$

Expenses:

$

Total expenses

$

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2. Prepare a statement of owner's equity for the current year ended December 31, 2014.

New World Travel Agency

Statement of Owner's Equity

For the Year Ended December 31, 2014

$

$

$

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3. Prepare a balance sheet as of December 31, 2014. When entering assets, enter them in order of liquidity.

New World Travel Agency

Balance Sheet

December 31, 2014

Assets

$

Total assets

$

Liabilities

$

Owner's Equity

Total liabilities and owner's equity

$