FINAL ANSWERS Income statement and balance sheet versions B and D-2 9.44.52 AM

Income statement for the six month period ending December 31, 2015
Services income 220,000
Dividend income from investments 3,500
less: expenses
Salaries paid to owners (80,000)
Wages paid to employees (50,000)
Rent (10,000)
Travel costs to customer locations (3,500)
Book depreciation (8,000)
Interest to banks (7,500)
Interest to shareholder (7,500)
Cleaning (1,200)
Utilities (2,500)
Website costs (3,500)
Net income for the year 49,800

Balance sheet at December 31, 2015 This is Balance Sheet t
Cash 14,300
Accounts receivable 17,500
Investments 31,000
Equipment 42,500
less: accumulated depreciation (8,000)
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 (25,000)
Net assets 14,800
Equity 50,000
Retained earnings 49,800
less: distribution (85,000)
Net equity 14,800

to be used for Schedule L

Book to tax reconciliation
Book income Debit Credit
Services income 220,000 (17,500) 25,000
Dividend income from investments 3,500
less: expenses
Salaries paid to owners (80,000)
Wages paid to employees (50,000)
Rent (10,000)