Question & Answer: technology and sophisticated mapping software to alert its customers to trespassing, illegal dumping…..

Reagan Sakai is in charge of financial management for Land Monitrix. Land Monitrix utilizes satellite technology and sophisticated mapping software to alert its customers to trespassing, illegal dumping, and other encroachments on property these customers own around the globe. Customers typically purchase one-year contracts for this service, and the pricing depends on the number and size of sites monitored.

Mr. Sakai desires to review financial reports — an income statement, statement of retained earnings, and balance sheet. Prepare these reports from the following adjusted trial balance. Mr. Sakai needs this information for internal review purposes, and does not require a classified balance sheet. The operating data relate to the full year, and the blank worksheet already includes partial data.

LAND MONITRIX CORPORATION

Adjusted Trial Balance

As of December 31, 20X5

Debits

Credits

Cash

$ 834,221

$ –

Accounts receivable

345,909

–

Prepaid expenses

45,787

–

Supplies

66,665

–

Satellite equipment

3,009,000

–

Accumulated depreciation

–

1,222,199

Accounts payable

–

544,190

Unearned revenues

–

455,000

Loan payable

–

1,000,000

Capital stock

–

560,000

Retained earnings, Jan. 1

–

228,892

Dividends

50,000

–

Revenues

–

2,373,402

Selling expenses

476,445

–

Interest expense

80,000

–

Salaries expense

677,667

–

Maintenance and supplies expense

222,989

–

Depreciation expense

575,000

–

$ 6,383,683


	Income Statement

		Revenues
		Services to customers		$ –
		Expenses
			$ –
			–
			–
			–
			–	–
		Net income		$ –


Note — The “Excel” tip uses macros, and your security settings may limit access.

	LAND MONITRIX CORPORATION
	Statement of Retained Earnings

		Beginning retained earnings		$ –
		Plus: Net income		–
				$ –
				–
				$ –













	LAND MONITRIX CORPORATION
	Balance Sheet

		Assets
				$ –
				–
				–
				–
		Satellite equipment	$ –
		Less: Accumulated depreciation	–	–
		Total assets		$ –

		Liabilities
			$ –
			–
			–
		Total liabilities		$ –
		Stockholders’ equity
			$ –
			–
		Total stockholders’ equity		–
		Total liabilities and equity		$ –

Expert Answer


Income Statement

Revenues
Services to cutomers		2,373,402
Expenses
Selling expense	476,445
interest expense	80,000
Salaries expense	677,667
maintenance &supplies expense	222,989
Depreciation expense	575,000	2,032,101
Net income		341,301


Statement of Retained Earnings

Beginning retained earnings		228,892
plus:Net income		341,301
		570,193
less Dividends		50,000
Closing retained earnings		520,193


Balance Sheet
Assets
Cash		834,221
Accounts receivable		345,909
prepaid expense		45,787
Supplies		66,665
Satellite Equipment	3,009,000
less:Accum depr	1,222,199	1,786,801
total assets		3,079,383

liabilitis
Accounts payable	544,190
unearned revenues	455,000
loan payable	1,000,000
total liabilties		1,999,190
Stockholder’s Equity
capital stock	560,000
Retained earnings	520,193
total stockholder’s Equity		1,080,193
total liabilities & Equity		3,079,383

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