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The following items and amounts were taken from Familia Inc.s 2022 income statement and balance sheet, the end of its first year of operations. Instructions a. In each case, identify on the blank line whether the item is an asset (A), liability (L), stockholders equity (SE), revenue (R), or expense (E) item. b. Prepare an income statement for Familia Inc.

Chapter 1, Exercises #11

The following items and amounts were taken from Familia Inc.’s 2022 income statement and balance sheet, the end of its first year of operations. 

Interest expense Interest payable Notes payable Sales revenue Equipment, net Depreciation expense $ 2,200 $54,700 3,200


Instructions 

a. In each case, identify on the blank line whether the item is an asset (A), liability (L), stockholders’ equity (SE), revenue (R), or expense (E) item. 

b. Prepare an income statement for Familia Inc. for December 31, 2022.

Transcribed Image Text:

Interest expense Interest payable Notes payable Sales revenue Equipment, net Depreciation expense $ 2,200 $54,700 3,200 4,100 700 Supplies Common stock 11,800 44,300 2,900 26,800 Supplies expense Cash Salaries and wages expense 900 15,600

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a. E Interest Expense A Equipment (net) L Interest Payable E Depreciat…View the full answer

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Related Book For answer-question
Financial Accounting Tools for Business Decision Making

Financial Accounting Tools for Business Decision Making

9th edition

Authors: Paul D. Kimmel, Jerry J. Weygandt, Donald E. Kieso

ISBN: 978-1119493631

Related Video

Depreciation of non-current assets is the process of allocating the cost of the asset over its useful life. The cost of the asset includes the purchase price, any additional costs incurred to bring the asset to its current condition and location, and any other costs that are directly attributable to the asset. The useful life of the asset is the period over which the asset is expected to be used by the company. To calculate the depreciation, companies use different methods such as straight-line, declining-balance, sum-of-the-years\'-digits, units-of-production, and group depreciation. The chosen method will depend on the type of asset, the company\'s accounting policies, and the accounting standards that are applicable. The straight-line method allocates an equal amount of the asset\'s cost over its useful life, while the declining-balance method calculates depreciation at a fixed rate, typically double the straight-line rate, but the amount of depreciation decreases over time. The sum-of-the-years\'-digits method is similar to the declining-balance method, but the rate of depreciation is calculated using a fraction that is based on the useful life of the asset. It\'s important to note that the depreciation expense will be recorded on the company\'s income statement and the accumulated depreciation will be recorded on the company\'s balance sheet. This will decrease the value of the asset on the balance sheet over time.

Answers for Questions in Chapter 1

Brief Exercises:
Critical Thinking:
DO IT! Exercises:
Exercises:
Problem Set A:
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