Weber Pest Removal - Income Statement
Essay by yiselda • April 22, 2018 • Case Study • 963 Words (4 Pages) • 546 Views
Weber Pest Removal
Income Statement
For the 6 Months Ended June 30, 2011
Revenue
Sales Revenue $150,000
Total Revenue $150,000
Expenses
Cost of Goods Sold $52,800
Wage Expense $40,000
Rent Expense $60,000
Administrative Expense $10,000
Interest Expense $6,000
Total Expenses $168,800
Net Income $(18,800)
Weber Pest Removal
Balance Sheet
June 30, 2011
ASSETS
Current Assets
Cash $291,000
Accounts Receivable $30,000
Inventory $19,200
Security Deposit $10,000
Total Current Assets $350,200
Total Assets $350,200
LIABILITIES
Current Liabilities
Wages Payable $(15,000)
Unearned Revenues $10,000
Total Current Liabilities $(5,000)
Total Liabilities $(5,000)
STOCKHOLDER'S EQUITY
Common Stock $350,000
Retained Earnings $(4,800)
Total Stockholder’s Equity $345,200
Total Liabilities & Stockholders’ Equity $340,200
Question 3:
Focus on the catering transaction on May 1. Suppose Weber offers a discount of 1% if receivables are paid in 10 days, and the customer takes advantage of this discount each month. How would this affect the revenues, total expenses, net income, and total assets for the six-month period ending June 30, 2011?
Before Discount | With Discount | ||
Revenues | $150,000 | Revenues | $149,500 |
Total Expenses | $168,800 | Total Expenses | $168,800 |
Net Income | $(18,800) | Net Income | $(19,300) |
Total Assets | $350,200 | Total Assets | $349,700 |
After the discount, the revenue, net income, and total assets are affected; they decrease by $500 each. This occurs because for the two services provided between May 1st and June 30th, each will pull in $250 less in receivable earnings than before the discount, which directly effects the retained earnings for the service as well as assets.
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