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In this Applying Excel exercise you will practice using basic formulas to prepare an Income Statement and a Balance Sheet.

Watch the tutorial video and then complete Parts 1 and 2 to practice and apply the skills demonstrated in the video.

Revise the data in your spreadsheet based on the following assumptions, and then answer the questions that follow:

Expenses: Advertising Expense $10,200 Assets: Cash $22,200

Insurance expense 16,200 Accounts receivable 20,200

Salaries expense 45,200 Supplies 11,200

Rent expense 6,200 Land 45,500

Liabilities: Salaries payable 8,200 Revenues: Service revenue 90,200

Notes payable 20,800 Interest revenue 5,200

Dividends: Dividends 5,200 Equity: Common stock 40,200

Retained earnings 17,500

Required:

1. What is the Net Income/(Loss)?

multiple choice 1

$17,500

$17,600

$18,700

$24,300

Assume the company has an increase in its Salaries Expense of 20% and a decrease in Service Revenue of 15%. Both of which will be settled after the year end. Adjust and recalculate the balances in the Income Statement and Balance Sheet. All sales are on account.

2. What is the revised balance of the Service Revenue account?

multiple choice 2

$14,030

$76,670

$22,030

$40,030

3. What is the revised Net Income/(Loss)?

multiple choice 3

$8,670

$(4,970)

$14,670

$1,670

4. What is the revised balance in the Retained Earnings account?

multiple choice 4

$1,700

$6,700

$7,330

$14,700