On December 31,2019,Pack-And-Deliver Company Completed Its First Year of Operations

question 4

Essay

On December 31,2019,Pack-and-Deliver Company completed its first year of operations.The following information has been provided for the year:
a.Sold packing supplies for $30,000 and provided $280,000 of delivery services.
b.All packing supplies sales were for cash.
c.Collected $212,000 of delivery service revenue.
d.Paid $15,000 cash to rent packing equipment,with $10,000 for rental in 2019 and the remaining amount for rental in 2020.
e.Spent $4,000 cash to repair delivery equipment during the year.
f.Bought packing supplies at a total cost of $46,000 and paid for $25,000 of these supplies.There were $20,000 of these supplies that have not yet been sold or used.
g.Paid employees $80,000 during the year.
h.Paid $16,000 for advertising for the year.
i.Used $14,000 in fuel for the delivery equipment.
j.Sold investments for $8,000 that had been purchased earlier in the year for $7,000.
k.Ordered $500 in spare parts and supplies.
l.Income tax expense for the year is $18,000.
Prepare an income statement for Pack-and-Deliver Company for the year ended December 31,2019.

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Definitions:

Partnership

A lawful collaboration between two or more parties to manage a business and share its profits.

Withdraw Assets

The act of taking out assets, typically cash, from a business by its owner for personal use.

Partnership

A business structure in which two or more individuals manage and operate a business in accordance with the terms and objectives set out in a Partnership Agreement.

Articles of Partnership

A document that outlines the terms, conditions, and agreements among partners in a business partnership.