Question

Cheese Factory Incorporated reported the following information for the fiscal year ended August 31, 2015.
Accounts Payable $ 149,000
Accounts Receivable 19,000
Cash (balance on September 1, 2014) 79,000
Cash (balance on August 31, 2015) 90,000
Common Stock 100,000
Dividends 14,000
Equipment 759,000
Notes Payable 34,000
Office Expenses 115,000
Prepaid Rent 54,000
Retained Earnings (beginning) 414,000
Salaries and Wages Expense 975,000
Salaries and Wages Payable 174,000
Sales Revenue 1,738,000
Supplies 33,000
Utilities Expense 550,000
Other cash flow information:
Additional investments by stockholders $ 36,000
Cash paid to purchase equipment 44,000
Cash paid to suppliers and employees 1,498,000
Repayments of borrowings 159,000
Cash received from customers 1,681,000
Cash received from borrowings 9,000
Dividends paid in cash 14,000Required:Prepare income statement for the year ended Aug 31 2015.Prepare a statement of retained earnings for the fiscal year ended Aug 31 2015.

Answer 1

Answer:

              CHEESE FACTORY INCORPORATED

                            Income Statement

                For the Year Ended August 31, 2015

Revenues:  

Sales revenue                                                 $1,738,000

Total revenue                                           $1,738,000

Expenses

Salaries and wages expense  $975,000

Office expenses                       $115,000

Utilities expense                       $550,000

Total expenses                                                $1,640,000

Net income                                                      $98,000

                CHEESE FACTORY INCORPORATED

                   Statement of Retained Earnings

              For the Year Ended August 31, 2015

Retained earnings, beginning       $414,000

Add: Net income                            $98,000

Less: Dividends                              $14,000  

Retained earnings, ending           $498,000

Answer 2

a. Cheese Factory income statement for the year ended Aug 31 2015 is:$98,000.

b. Cheese Factory Statement of Retained Earnings for the year ended Aug 31 2015 is: $498,000.

Income statement:

a. Cheese Factory income statement for the year ended Aug 31 2015

Revenues:  

Sales revenue                         $1,738,000

Expenses:

Salaries and wages expense  $975,000

Office expenses                       $115,000

Utilities expense                       $550,000

Total expenses                          $1,640,000

Net income                                  $98,000

(1,738,000-$1,640,000)

b. Cheese Factory Statement of Retained Earnings for the year ended Aug 31 2015

Retained earnings, beginning       $414,000

Add Net income                              $98,000

Less Dividends                               ($14,000)

Retained earnings, ending           $498,000

Inconclusion Cheese Factory income statement for the year ended Aug 31 2015 is:$98,000 and Cheese Factory Statement of Retained Earnings for the year ended Aug 31 2015 is: $498,000.

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