Longhorn Corporation provides low-cost food delivery services to senior citizens. At the end of the year on December 31, 2021, the company reports the following amounts:

Cash $ 1,300 Service revenue $ 71,700

Equipment 20,000 Cost of goods sold (food expense) 54,200

Accounts payable 2,600 Buildings 22,000

Delivery expense 3,400 Supplies 1,600

Salaries Expense 6,300 Salaries payable 900

In addition, the company had common stock of $22,000 at the beginning of the year and issued an additional $2,200 during the year. The company also had retained earnings of $9,400 at the beginning of the year.

Required:

Prepare the income statement for Longhorn Corporation.

Prepare the statement of stockholders' equity for Longhorn Corporation.

Prepare the balance sheet for Longhorn Corporation.

1. Longhorn Corporation

Income Statement

For the year ended December 31, 2021

Service Revenue $71,700

Cost of goods sold 54,200

Gross profit $17,500

Operating expenses:

Delivery expense 3,400

Salaries expense 6,300

Operating income $7,800

2. Longhorn Corporation

Stockholder's Equity

As of December 31, 2021

Capital Retained Earnings Total

1-Jan-21 $22,000 $9,400 $ 31,400

Issuance of share 2,200 2,200

Net income 7,800 7,800

31-Dec-21 $24,200 $17,200 $41,400

3. Longhorn Corporation

Balance Sheet

As of December 31, 2021

Asset

Current Assets

Cash $1,300

Supplies 1,600

Total current assets 2,900

Non-current assets

Equipment 20,000

Buildings 22,000

Total non-current assets 42,000

Total assets $44,900

Liabilities and Equity

Current liability

Accounts payable $2,600

Salaries payable 900

Total current liabilities $3,500

Total liabilities $3,500

Equity

Capital stock $24,200

Retained earnings 17,200

Total equity $41,400

Total liabilities and Equity $44,900

Explanation:

1. Income Statement

In preparation of Income statement, we must closed all nominal accounts with it starts from revenue and deduct all expenses to arrive the operating income. It is important that we never forget the headings consists of Name of the company, What schedule to prepare and what period it is applicable for.

2. Statement of changes in Equity

In preparation of statement of changes equity, all transaction affecting the corporation's capital will be presented here. Begins with the capital, add additional issuance and the net income for the period that will be closed to retained earnings.

3. Balance sheet

This schedule presents the corporations real accounts. Started from assets, liabilities and the Equity. It is important that we never forget the headings consists of Name of the company, What schedule to prepare and what period it is applicable for.