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    Gmernacej W5C5 AssigmentOLD

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    alma
    The income statement of Green Lawns, Inc. for the year ending December 31, 2021 shows the company generated $230,400 in revenue from lawn care services but incurred $158,640 in expenses, resulting in net income of $71,760. The statement of retained earnings indicates the company began the year with $108,000 in retained earnings and ended with $174,960 after adding net income and deducting $4,800 in dividends paid. The balance sheet lists the company's assets as $246,960, which exceeds its liabilities of $12,000, giving it a strong current ratio of over 19 to 1.

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    Gmernacej W5C5 AssigmentOLD

    Uploaded by

    alma
    185 views6 pages
    The income statement of Green Lawns, Inc. for the year ending December 31, 2021 shows the company generated $230,400 in revenue from lawn care services but incurred $158,640 in expenses, resulting in net income of $71,760. The statement of retained earnings indicates the company began the year with $108,000 in retained earnings and ended with $174,960 after adding net income and deducting $4,800 in dividends paid. The balance sheet lists the company's assets as $246,960, which exceeds its liabilities of $12,000, giving it a strong current ratio of over 19 to 1.

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    The income statement of Green Lawns, Inc. for the year ending December 31, 2021 shows the company generated $230,400 in revenue from lawn care services but incurred $158,640 in expenses, resulting in net income of $71,760. The statement of retained earnings indicates the company began the year with $108,000 in retained earnings and ended with $174,960 after adding net income and deducting $4,800 in dividends paid. The balance sheet lists the company's assets as $246,960, which exceeds its liabilities of $12,000, giving it a strong current ratio of over 19 to 1.

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    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Download as xlsx, pdf, or txt
    185 views6 pages

    Gmernacej W5C5 AssigmentOLD

    Uploaded by

    alma
    The income statement of Green Lawns, Inc. for the year ending December 31, 2021 shows the company generated $230,400 in revenue from lawn care services but incurred $158,640 in expenses, resulting in net income of $71,760. The statement of retained earnings indicates the company began the year with $108,000 in retained earnings and ended with $174,960 after adding net income and deducting $4,800 in dividends paid. The balance sheet lists the company's assets as $246,960, which exceeds its liabilities of $12,000, giving it a strong current ratio of over 19 to 1.

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    You are on page 1of 6

    Exercise 5.

    2
    a.
    Green Lawns, INC
    Income Statement
    For the year ending Dec 31, 2021

    Revenues:
    Lawn Care revenue earned $ 230,400
    Expenses:
    Salary Expense $ 124,800
    Supply Expense $ 2,880
    Advertising expense $ 720
    Depriciacion expense equipment $ 2,400
    Income tax expense $ 27,840
    (Less) total expenses $ (158,640)
    Net income $ 71,760

    Green Lawns, INC


    Statement of retained earnings
    For the year ending Dec 31, 2021
    Beginning retained earnings $ 108,000
    Add: Net income $ 71,760
    Sub total $ 179,760
    Less Dividends $ (4,800)
    Ending retained earnings $ 174,960

    Green Lawns, INC


    Balance Sheet
    As of Dec 31, 2021
    Assets Amount Liabilities & Stockholder's equity
    Cash $ 218,640 Liabilities
    Accounts receivable $ 10,800 Accounts payable
    Supplies $ 720 Income tax payable
    Equipment $ 28,800 Total Liabilities
    Less: Accumulated Depriciation $ (12,000) $ 16,800
    Total Assets $ 246,960 Stockholder's equity
    Capital stock
    Retained earnings
    Total stockholders equity
    Total liabilities and stockholder's equity

    b.
    Looking at the current asset ratio of Green Lawns, Inc, the company appears to be liquid, it has assets equal to $246,960 and l
    equal to $12,000. By calculating that $246,960(total assets)/$12,000(total liabilities) = 19.18:1. The company has 19.18 times
    current total assets to meet its short-term obligation
    Looking at the current asset ratio of Green Lawns, Inc, the company appears to be liquid, it has assets equal to $246,960 and l
    equal to $12,000. By calculating that $246,960(total assets)/$12,000(total liabilities) = 19.18:1. The company has 19.18 times
    current total assets to meet its short-term obligation

    c.
    By looking at retained earnings in the beginning of the year, Green Lawn, Inc has been profitable in the past. After all expenses
    dividends were paid out, the company still had $108,000 in retained earnings.
    der's equity Amount

    $ 3,600
    $ 8,400
    $ 12,000

    $ 60,000
    $ 174,960
    quity $ 234,960
    tockholder's equity $ 246,960

    sets equal to $246,960 and liabilities


    e company has 19.18 times more
    n the past. After all expenses and
    Internet Consulting Service, INC.
    Worksheet
    Ended December 31, 2021
    Trial balance Adjustments Adjustment Trial Balance
    Debit Credit Debit Credit Debit
    Balance Sheet Accounts:
    Cash 49,100 49,100
    Consulting fees receivable 23,400 (7) 11,000 34,400
    Prepaid office rent 6,300 (1) 2100 4,200
    Prepaid dues and subscriptions 300 (2) 50 250
    Supplies 600 (3) 150 450
    Equipment 36,000 36,000
    Accumulated Depr: Equipment 10,200 (4) 600
    Notes Payable 5,000
    Income Tax Payable 12,000 (9) 5,000
    Unearned Consulting Fees 5,950 (6) 2,850
    Capital Stock 30,000
    Retained Earnings 32,700
    Dividends 60,000 60,000
    Salaries Payable (8) 1,700
    Interest Payable (5) 100

    Income Statement Accounts:


    Consulting fees earned 257,180 (6) 2,850
    (7) 11,000
    Salaries Expense 88,820 (8) 1,700 90,520
    Telephone Expense 2,550 2,550
    Rent Expense 22,000 (1) 2,100 24,100
    Income Taxes expense 51,000 (9) 5,000 56,000
    Dues and subsriptions expense 560 (2) 50 610
    Supplies Expense 1,600 (3) 150 1,750
    Depriciation Expense: Equipment 6,600 (4) 600 7,200
    Misc. Expenses 4,200 4,200
    353,030 353,030
    Interest Expense (5) 100 100
    23,550 23,550 371,430
    Net Income
    Total

    Adjustments:
    1. December rent expense .
    2.December dues and subscriptions expese.
    3.December supplies use. ($600-$450).
    4.Depriciacion expense ($36,000/60 mos.).
    5.Accrued interest on notes payable.
    6. Consulting services -paid in advance
    7.Services rendered but not billed
    8.Salaries earned but not paid
    9.Estimated income taxes expense
    vice, INC.

    , 2021
    Adjustment Trial Balance Income Statement Balance Sheet
    Credit Debit Credit Debit Credit

    49,100
    34,400
    4,200
    250
    450
    36,000
    10,800 10,800
    5,000 5,000
    17,000 17,000
    3,100 3,100
    30,000 30,000
    32,700 32,700
    60,000
    1,700 1,700
    100 100

    271,030 271,030

    90,520
    2,550
    24,100
    56,000
    610
    1,750
    7,200
    4,200

    100
    371,430 187,030 271,030 184,400 100,400
    84,000 84,000
    271,030 271,030 184,400 184,400

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