Session 2 HW

Problem 1- 6

Transaction statement Assets

Cash Boats
40000
-20000 80000
Total 20000 80000

7730
Total 27730
-4000
Total 23730
-18230
Total 5500
-5400
Total 100
12560
Total 12660
12660 80000

Total

Income statement for July 31

Income statement Amt Total

Revenues
Fishing revenue 21300
Cash fares 7730
Passenger serv rev 12560
Total revenue 41590

Expense (less)
Salary and wages 18230
Rent expense 4000
Total expense 22230

Net income 19360

Balance sheet on July 31

Assets Amt Liability and Shareholder equity
Cash 12660 Notes payable
Boats 80000 Capital
Account recievable 21300 Retained earnings
 Total assets 113960 Total Liability + SE

Ans 3 - The info we need on notes payable to assess the long term viability of Green Bay Co is if the company is able to rep

Problem 2-2
Appear in income
statement as exp?
1. Display fixtures in a retail store Yes

2. Advertising Yes

3. Merchandise for sale No

4. Incorporation (i.e., legal costs, stock

issue costs) Yes

5. Cost of a franchise Yes

6. Office supplies Yes

7. Wages and salaries Yes

8. Computer software No

9. Computer hardware No

Problem 2-6

Income statement for for Shawn Co

for Dec 31 2012
Income statement Amt Total

Revenues
Sales revenue 48300
Rent revneue 6700
Interest revenue 1340

Total revenue 56340

Expenses(less)
Advertising exp 1500
Commission exp 2415
Cost of good sold 29200
Depreciation exp 2900
Income tax 1540
Insurance 2250
 Interest exp 1400
Salaries and wages 12560
Supplies exp 890

Total expense 54655

Net income 1685

The weakness we see here is that we cannot subdivide the income statement into various sub sections and hence the prop
ssets Liabilities Shareholder equity
Acc recievable Acc payable Notes payable Capital stock RE
40000
60000
60000 40000
21300 21300
7730
29030
-4000
25030
-18230
6800
-5400
1400
12560
13960
21300 60000 40000 13960

113960 113960

y and Shareholder equity Amt

60000
40000
13960
 113960

Bay Co is if the company is able to repay its notes payable on time with its revnues or maybe assets balance.
rious sub sections and hence the proper breakup of costs and revenue cannot be shown. This will not give the reader an indepth view
e reader an indepth view of the income statement.