FINAL ANSWERS Income statement and balance sheet versions A and C(1)

Income statement for the six month period ending December 31, 2015
Services income 500,000
Dividend income from investments 2,200
less: expenses
Salaries paid to owners (150,000)
Wages paid to employees (120,000)
Rent (20,000)
Travel costs to customer locations (3,500)
Book depreciation (7,000)
Interest to banks (6,000)
Interest to shareholder (6,000)
Cleaning (1,200)
Utilities (2,500)
Website costs (3,500)
Net income for the year 182,500

Balance sheet at December 31, 2015 This is Balance Sheet t
Cash 13,500
Accounts receivable 52,500
Investments 31,000
Equipment 35,000
less: accumulated depreciation (7,000)
less: Liabilities
Accounts payable
- wages to employees (9,000)
- rent (2,500)
- interest to shareholder (6,000)
Loans from shareholder (20,000)
Loans from bank (guaranteed by owner) (20,000)
Amounts received from customers in advance (15,000)
Net assets 52,500
Equity 50,000
Retained earnings 182,500
less: distribution (180,000)
Net equity 52,500

to be used for Schedule L

Book to tax reconciliation
Book income Debit Credit
Services income 500,000 (52,500) 15,000
Dividend income from investments 2,200
less: expenses
Salaries paid to owners (150,000)
Wages paid to employees (120,000) 9,000
Rent (20,000) 2,500