Answer:
Destin Incorporated
1. Net income for the month ended April 30, 2012 is $1,000.
2. Retained earnings as of April 30, 2012 is $6,000.
3. Total assets as of April 30, 2012 is $41,000.
4. Total liabilities as of April 30, 2012 is $10,000.
5. The total owners' equity as of April 30, 2012 is $31,000.
6. The balance of Accumulated depreciation as of April 30, 2012 is $4,000.
Explanation:
a) Data and Calculations:
Balance sheet:
Assets
Cash                  3,000 + 16,000 -2,000 - 1,000 - 10,000 = 6,000
Inventory              14,000 + 10,000 - 9,000 = 15,000
Prepaid Insurance       3,000 - 2,000 = 1,000
Equipment (net) Â Â Â Â Â Â Â 20,000 - 1,000
Total Assets           40,000
Liabilities & Owners' Equity
Loan Payable          10,000
Common Stock        25,000
Retained Earnings      5,000
Total Liabilities and OE 40,000
Revenue          $16,000
Cost of goods sold    9,000
Gross profit         $7,000
Wages              2,000
Other expenses      1,000
Depreciation expense 1,000
Insurance expense   2,000
Total expenses     $6,000
Net income         $1,000
Retained earnings:
Beginning balance   5,000
Net income         1,000
Ending balance     6,000
Total assets:
Cash balance  6,000
Inventory     15,000
Prepaid insur. Â Â 1,000
Equipment    19,000
Total assets = 41,000
Total liabilities:
Loan Payable  10,000
Equity:
Common Stock   25,000
Retained earnings  6,000
Owners' equity   31,000
For the year, the balance of Accumulated Depreciation = $4,000 ($1,000 * 4)
