Question

"Izzo Company completed its fourth year of operations ended December 31, 2019. Prepare the (1) Income Statement for the year ended December 31, 2019 and the (2) Balance Sheet as of December 31, 2019 for the Izzo Company. Use the below account balances to complete the provided blank financial statements. Add proper headings when making these statements. Each account balance will show up on one of the two statements. Make sure Assets=Liabilities plus Stockholders' Equity.


Cash 213,000
Accounts Payable 34,000
Service Fees Revenue 275,000
Supplies Expense 8,000
Insurance Expense 4,000
Retained Earnings, 12/31/2019 195,000
Building 80,000
Rent Expense 10,000
Salaries Expense 56,000
Supplies Inventory 32,000
Contributed Capital 80,000
Notes Payable 32,000
Accounts Receivable 6 000

Answer 1

Answer and Explanation:

The Preparation of the income statement is shown below:-

Izzo Company

Income statement

For the year ended December 31, 2019

Particulars                             Amount

Service Fee Revenue             $275,000

Total Revenue a                      $275,000

Expenses:

Supplies expense                    $8,000

Insurance expense                  $4,000

Rent expense                           $10,000

Salaries expense                     $56,000

Total Expense b                       $78,000

Net Income (a-b)                       $197,000

2. The preparation of the balance sheet is shown below:-

Izzo Company

Balance sheet

For the year ended December 31, 2019

Assets

Current assets:  

Cash                                     $213,000

Accounts Receivable            $16,000

Supplies Inventory                $32,000

Total current assets              $261,000

Property, plant, and equipment:  

Building                                 $80,000

Total Long-term assets       $80,000

Total Assets                        $341,000

Liabilities

Current liabilities:

Account Payable                $34,000

Total current liabilities         $34,000

Long term liabilities

Notes payable [long term]   $32,000

Total long term Liabilities  $32,000

Stockholders` Equity

Contributed capital              $80,000

Retained Earnings *              $195,000

Total stockholders` equity   $275,000

Total liabilities and stockholders

equity                                    $341,000

*Note

Beginning Balance                $200,000

Add: Net Income                    $197,000

Less:  

Cash Dividends                       ($202,000)

Retained Earnings Closing  

Balance                                       $195,000