Question

1. the following shows the last 6 columns of the goody two-shoes dance studio spreadsheet for the month ending april 30, 20x1.

a. complete the spreadsheet calculating net income (net loss) and finishing the balance sheet columns.

goodie two-shoes dance studio
spreadsheet
for the month ending april 30, 20x1

\

$$\begin{tabular}{|l|c|c|c|c|c|c|} \\hline & \\multicolumn{2}{|c|}{adjusted trial bal.} & \\multicolumn{2}{|c|}{income statement} & \\multicolumn{2}{|c|}{balance sheet} \\\\ account name & dr & cr & dr & cr & dr & cr \\\\ \\hline cash & 23,752 & & & & & \\\\ \\hline accts rec & 7,840 & & & & & \\\\ \\hline prepaid rent & 2,280 & & & & & \\\\ \\hline equipment & 18,050 & & & & & \\\\ \\hline acc. depr. eq & & 4,921 & & & & \\\\ \\hline accts pay & & 5,700 & & & & \\\\ \\hline interest pay & & 57 & & & & \\\\ \\hline notes payable & & 5,672 & & & & \\\\ \\hline t. goodie, cap. & & 30,960 & & & & \\\\ \\hline t. goodie, draw & 3,650 & & & & & \\\\ \\hline lessons rev & & 15,590 & & & & \\\\ \\hline salaries exp & 5,840 & & & & & \\\\ \\hline rent exp & 760 & & & & & \\\\ \\hline depr. exp & 671 & & & & & \\\\ \\hline interest exp. & 57 & & & & & \\\\ \\hline totals & 62,900 & 62,900 & & & & \\\\ \\hline net income & & & & & & \\\\ \\hline \\end{tabular}$$

no additional investments were made this period.

b. from the completed spreadsheet prepare the \classified\ balance sheet for the month ending april 30, 20x1.

Explanation:

Sort accounts to statements

We classify each account from the Adjusted Trial Balance into either the Income Statement or the Balance Sheet:

• Cash (Asset): Balance Sheet DR \(23,752\)
• Accts Rec (Asset): Balance Sheet DR \(7,840\)
• Prepaid Rent (Asset): Balance Sheet DR \(2,280\)
• Equipment (Asset): Balance Sheet DR \(18,050\)
• Acc. Depr. Eq (Contra-Asset): Balance Sheet CR \(4,921\)
• Accts Pay (Liability): Balance Sheet CR \(5,700\)
• Interest Pay (Liability): Balance Sheet CR \(57\)
• Notes Payable (Liability): Balance Sheet CR \(5,672\)
• T. Goodie, Cap. (Equity): Balance Sheet CR \(30,960\)
• T. Goodie, Draw (Contra-Equity): Balance Sheet DR \(3,650\)
• Lessons Rev (Revenue): Income Statement CR \(15,590\)
• Salaries Exp (Expense): Income Statement DR \(5,840\)
• Rent Exp (Expense): Income Statement DR \(760\)
• Depr. Exp (Expense): Income Statement DR \(671\)
• Interest Exp (Expense): Income Statement DR \(57\)

Calculate Net Income

We sum the Income Statement columns to find the difference:

• Total Revenues (CR): \(15,590\)
• Total Expenses (DR): \(5,840 + 760 + 671 + 57 = 7,328\)
• Net Income: \(15,590 - 7,328 = 8,262\)

We enter \(8,262\) in the Income Statement DR column to balance it at \(15,590\).
We also enter \(8,262\) in the Balance Sheet CR column to balance the Balance Sheet.

Balance the Balance Sheet

We sum the Balance Sheet columns before Net Income:

• Total DR: \(23,752 + 7,840 + 2,280 + 18,050 + 3,650 = 55,572\)
• Total CR: \(4,921 + 5,700 + 57 + 5,672 + 30,960 = 47,310\)

Adding Net Income (\(8,262\)) to the CR side:

• Balanced CR Total: \(47,310 + 8,262 = 55,572\)

Both sides balance at \(55,572\).

Calculate ending Capital

To prepare the Classified Balance Sheet, we calculate the ending Capital:

• Ending Capital = Beginning Capital + Net Income - Drawing
• Ending Capital = \(30,960 + 8,262 - 3,650 = 35,572\)

Prepare Classified Balance Sheet

We group assets and liabilities into current and non-current categories:

• Current Assets: Cash (\(23,752\)), Accounts Receivable (\(7,840\)), Prepaid Rent (\(2,280\)). Total Current Assets = \(33,872\).
• Property, Plant, and Equipment: Equipment (\(18,050\)) less Accumulated Depreciation (\(4,921\)) = Book Value (\(13,129\)).
• Total Assets: \(33,872 + 13,129 = 47,001\).
• Current Liabilities: Accounts Payable (\(5,700\)), Interest Payable (\(57\)), Notes Payable (\(5,672\)). Total Current Liabilities = \(11,429\).
• Owner's Equity: T. Goodie, Capital (\(35,572\)).
• Total Liabilities and Owner's Equity: \(11,429 + 35,572 = 47,001\).

Answer:

Part a: Completed Spreadsheet Columns

Account Name	Adjusted Trial Balance DR	Adjusted Trial Balance CR	Income Statement DR	Income Statement CR	Balance Sheet DR	Balance Sheet CR
Accts Rec	7,840				7,840
Prepaid Rent	2,280				2,280
Equipment	18,050				18,050
Acc. Depr. Eq		4,921				4,921
Accts Pay		5,700				5,700
Interest Pay		57				57
Notes Payable		5,672				5,672
T. Goodie, Cap.		30,960				30,960
T. Goodie, Draw	3,650				3,650
Lessons Rev		15,590		15,590
Salaries Exp	5,840		5,840
Rent Exp	760		760
Depr. Exp	671		671
Interest Exp	57		57
Subtotals	62,900	62,900	7,328	15,590	55,572	47,310
Net Income			8,262			8,262
Totals			15,590	15,590	55,572	55,572

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Part b: Classified Balance Sheet

GOODIE TWO-SHOES DANCE STUDIO

Balance Sheet

April 30, 20X1

Assets

Current Assets:

• Cash: \(23,752\)
• Accounts Receivable: \(7,840\)
• Prepaid Rent: \(2,280\)
• Total Current Assets: \(33,872\)

Property, Plant, and Equipment:

• Equipment: \(18,050\)
• Less: Accumulated Depreciation - Equipment: \((4,921)\)
• Total Property, Plant, and Equipment: \(13,129\)

Total Assets: \(47,001\)

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Liabilities and Owner's Equity

Current Liabilities:

• Accounts Payable: \(5,700\)
• Notes Payable: \(5,672\)
• Interest Payable: \(57\)
• Total Current Liabilities: \(11,429\)

Owner's Equity:

• T. Goodie, Capital (Ending): \(35,572\)

Total Liabilities and Owner's Equity: \(47,001\)