Anya’s Bookstore Part A - Year 1 of Operations

Full Answer Section

Income Statement for the Year Ended December 31, 2015

| Revenue | | Expenses | | |---|---|---|---| | Sales Revenue | $45,000 | Cost of Goods Sold | $25,000 | | | | Salary Expense | $10,000 | | | | Rent Expense | $3,000 | | | | Electricity Expense | $2,000 | | | | Interest Expense | $3,000 | | Net Income | $2,000 | | |

Balance Sheet as of December 31, 2015

| Assets | | Liabilities | | |---|---|---|---| | Cash | $17,000 | Notes Payable | $20,000 | | Inventory | $15,000 | Accounts Payable | $0 | | Total Assets | $32,000 | Total Liabilities | $20,000 | | Owner's Equity | | | Owner's Capital (Anya) | $10,000 | | Owner's Capital (Friend) | $10,000 | | Total Owner's Equity | $20,000 | | | | Total Liabilities and Owner's Equity | $32,000 | | |

Sample Solution

These transactions are recorded in a general journal format, which is typically used to record the chronological order of business transactions.

General Journal Entries