works weddings and promtype parties The balance of AbbottAbb

works weddings and prom-type parties. The balance of AbbottAbbott , Capital was $ 14 comma 000$14,000 at DecemberDecember 3131 , 20132013. At DecemberDecember 3131 , 20142014 , the business\'s accounting records show these balances: Prepare the following financial statements for Picture GalleryPicture Gallery for the year ended DecemberDecember 3131 , 20142014 : a. Income statement b. Statement of owner\'s equity c. Balance sheet

Insurance Expense

$4,000

Accounts Receivable

$13,000

Cash

43,000

Notes Payable

16,000

Accounts Payable

12,000

Abbott, Capital, Dec. 31, 2014

?

Advertising Expense

4,500

Salaries Expense

26,000

Service Revenue

100,000

Equipment

62,500

Abbott, Withdrawals

17,000

Owner contribution, 2014

28,000

Solution

Answer a. Picture Gallery Income Statement For the Period Ended Dec 31, 2014 Revenue: Service Revenue              100,000 Expenses: Insurance Expenses              4,000 Advertising Expenses              4,500 Salaries Expenses            26,000                34,500 Net Income                65,500 Answer b. Picture Gallery Statement of Owners\' Equity For the Year Ended Dec 31, 2014 Abbott Capital - Dec 31, 2013            14,000 Owner Contribution, 2014            28,000 Net Income            65,500 Sub-total          107,500 Abbott Withdrawls          (17,000) Abbott Capital - Dec 31, 2014            90,500 Answer c. Picture Gallery Balance Sheet For the Year Ended Dec 31, 2014 Assets Current Assets Cash            43,000 Accounts Receivable            13,000                56,000 Property, Plant & Equipment Equipment                62,500 Total Assets              118,500 Liabilities & Owners\' Equity Liabilities Current Liabilities Accounts Payable                12,000 Long Term Liabilities Notes Payable                16,000 Total Liabilities                28,000 Owner\'s Equity                90,500 Total Liabilities & Owners\' Equity              118,500