Accounting 2,3


Module 2 Practice Problem 3

Robson Corporation

Balance Sheet

As of December 31. 2020

 

Current Assets:                                     Current Liabilities:

Cash                                        $50,000           Accounts Payable                     $280,000

Accounts Receivable                $253,000         Notes Payable                          $475,000

Inventory                                  $373,000         Income Tax Payable                 $140,000

Prepaid Insurance Expense       $17,000           Salaries Payable                       $48,000

Prepaid Rent Expense               $15,000           Unearned Revenue                   $78,000

Accrued Legal Expenses           $46,000

 

Total Current Assets                 $708,000         Total Current Liabilities $1,067,000

 

Non-Current Assets:                                         Stockholder Equity:

Building                                    $750,000         Common Stock                        $225,000

Land                                        $300,000         Retained Earnings                     $656,000

Machinery                                $190,000        

Total Non-Current Assets         $1,240,000      Total Stockholders Equity         $831,000

 

Total Assets                             $1,948,000      Total Liabilities & S/Equity        $1,948,000

 

Robson Corporation

Income Statement

For the Year Ended December 31. 2020

Revenue:

Consulting Services Revenue                 $1,023,000

Total Revenue                                                                          $1,023,000

 

Expenses: 

Depreciation Expense                           $85,000

Income Tax Expense                            $75,000

Interest Expense                                   $42,000

Rent Expense                                       $97,000

Salaries Expense                                   $184,000

 

Total Expenses                                                             $483,000

Net Income/(Net Loss)                                                 $540,000

 

To calculate ending retained earnings as reported on the balance sheet: 

Beginning retained earnings                   $116,000

Plus: Net income                                   $540,000

Minus: Net loss                         $0

Minus: Dividends                                  $0

Ending retained earnings                        $656,000