The Assets and Liabilities of Rocky's Day Spa at December

question 77

Essay

The assets and liabilities of Rocky's Day Spa at December 31 and expenses for the year are listed below.The stockholders' equity was $68,000 $48,000 in Common Stock and $20,000 in Retained Earnings at January 1.The shareholders invested in an additional $10,000 of common stock during the year.Net income for the year is $45,625.
$\begin{array}{|l|r|l|r}\hline \text { Accounts payable } & \$ 4,375 & \text { Spa operating expense } & \$ 23,760 \\\hline \text { Accounts receivable } & 8,490 & \text { Office expense } & 2,470 \\\hline \text { Cash } & 13,980 & \text { Spa supplies } & 9,230 \\\hline \text { Fees earned } & ? ? ? & \text { Wages expense } & 26,580 \\\hline \text { Spa furniture \& equipment } & 56,000 & \text { Dividends } & 38,170 \\\hline \text { Computers } & 2,130 & & \\\hline\end{array}$ Prepare an income statement for Rocky's Day Spa for the current year ended December 31.

---

Definitions:

Trade Practice

Trade practice involves the customary ways in which trade is conducted within a particular industry, including standards of conduct, competition, and fair dealing.

Claim in Recoupment

A legal claim made in defense to a counterclaim, aiming to offset or reduce the amount of damages sought by the original claimant.

Personal Defense

Legal arguments or claims that an individual can use to avoid enforcement of a contract or demand based on issues personal to him or her.

Real Defense

Legitimate legal reasons that can be used to avoid the enforcement of a contract or negate an obligation.