Assignment

MAJOR ASSIGNMENT

Intro to Financial Management Accounting

PART I TOTAL MARKS 40 MARKS

Applying your understanding of the relationships among the financial statements:
Question 1 25 marks

The assets and liabilities of Toronto Service Inc. as of December 31, 2008, and revenue and expenses for the year ended December 31, 2008 are listed below:

|Accounts Payable |$21,000 | |Property tax expense |$5,000 |
|Accounts Receivable |25,000 | |Rent expense |3,000 |
|Advertising expense |10,000 | |Salary expense |85,000 |
|Building |140,000 | |Salary payable |12,000 |
|Cash |10,000 | |Service Revenue |200,000 |
|Furniture |20,000 | |Share Capital |75,000 |
|Interest expense |4,000 | |Supplies |3,000 |
|Land |98,000 | |Note Payable |95,000 |

Beginning Retained Earnings were $50,000 and dividends totalled $50,000 for the year.

Required:

Prepare the Income Statement for the year ended December 31, 2008 (5 marks)

Toronto Service Inc.

Income Statement
For the Year Ended December 31, 2008

Revenues Service Revenue $200,000.00 Total revenues $200,000.00
Expenses
Advertising expense $10,000.00