Prepare the Financial Statements for H

question 11

Essay

Prepare the financial statements for H.Logan of Logan Motorcycles from the following account balances: 1)an income statement,2)a statement of owner's equity,and 3)a balance sheet for the month ended October 31,200x.You will need to calculate the value of the Accounts Payable account (note: remember the basic accounting equation).
$$\begin{array} { l r } \text { Cash } & \$ 1,300 \\\text { Accounts Receivable } & 500 \\\text { Equipment } & 2,000 \\\text { Accounts Payable } & ? ? ? \\\text { Travis, Capital } & 3,000 \\\text { Revenue } & 1,000 \\\text { Expenses } & 700 \\\text { Travis, Withdrawal } & 100\end{array}$$

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Definitions:

Intra-entity Gross Profit

The gross profit resulting from transactions within the same company or between parent and subsidiary companies, which may need to be eliminated in consolidated financial statements.

Consolidation Worksheet

A tool used in preparation of consolidated financial statements that helps combine the financials of a parent company and its subsidiaries.

Goodwill

An intangible asset on a company's balance sheet representing the premium paid over the book value of the assets acquired in a merger or acquisition.

Undervalued Equipment

Equipment or assets that are appraised or recorded on financial statements at a value less than their true market value.