The following information is available for two different types of businesses for
ID: 2597709 • Letter: T
Question
The following information is available for two different types of businesses for the 2018 accounting year business that provides accounting services to small businesses. Sports Clothing is to college students . Hopkins CPAs is a service is a merchandising business that sells sports clothing Date for Hopkins CPAs 0100:47 1. Borrowed $38,000 from the bank to start the business 2 Provided $40,000 of services to clients and collected $40,000 cash. 3. Paid salary expense of $25,60o. Data for Sports Clothing 1. Borrowed $38,000 from the bank to start the business 2. Purchased $29,000 inventory for cash. 3. Inventory costing $24,400 was sold for $44,000 cash 4. Paid $3,500 cash for operating expenses. Required a. Prepare an income statement, balance sheet, and statement of cash flows for each of the companies Complete this question by entering your answers in the tabs below. 7of 20 Next >Explanation / Answer
Hopkins CPAs Income Statement For the year ended December 31, 2018 Revenue 40000 Less: Expenses Salary -25600 Net Income 14400 Hopkins CPAs Balance Sheet: As of December 31, 2018 Assets: Cash 52400 52400 Total Assets 52400 Liabilities: Borrowing 38000 38000 Stockholders' Equity Net Income 14400 14400 Total Liabilities and Equity 52400 Hopkins CPAs Statement of Cash Flows: For the year ended December 31, 2018 Cash Flow from operating activities: Net Income 14400 Net Cash Flow from operating activities 14400 Cash Flow from Investing activities: Borrowings 38000 38000 Cash Flow from Financing Activities: Net Cash Flow during the year 52400 Beginning Cash Balance 0 Ending Cash Balance 52400 Sports Clothing Income Statement For the year ended December 31, 2018 Revenue 44000 Ending Inventory (29000-24400) 4600 48600 Less: Exxpenses Purchase of Inventory -29000 Operating Expenses -3500 Net Income 16100 Sports Clothing Balance Sheet: As of December 31, 2018 Assets Inventory 4600 Cash 49500 Total Assets 54100 Liabilities: Borrowing 38000 38000 Stockholder's Equity: Net Income 16100 16100 Liabilities and Equity 54100 Sports Clothing Statement of Cash Flows: For the year ended December 31, 2018 Cash Flow from operating activities: Net Income 16100 Increase in Inventory -4600 Net Cash Flow from operating activities 11500 Cash Flow from Investing activities: Borrowings 38000 38000 Cash Flow from Financing Activities: Net Cash Flow during the year 49500 Beginning Cash Balance 0 Ending Cash Balance 49500
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