the assets and liabilities of rockys day spa on december 31 and its revenue and expenses for the year are listed below. the capital of the owner was $65,000 on january 1. the owner invested an additional $10,000 during the year.

accounts amounts accounts amounts
accounts payable $ 4,375 spa operating expense $23,760
accounts receivable 8,490 office expense 2,470
cash ??? spa supplies 9,230
fees earned 98,435 wages expense 26,580
spa furniture and equipment 56,000 drawing 38,170
computers 2,130

required:
prepare a balance - sheet for the year ended december 31. refer to the lists of accounts, labels, and amount descriptions for the exact wording of the answer choices for text entries. be sure to complete the statement heading.

Question

the assets and liabilities of rockys day spa on december 31 and its revenue and expenses for the year are listed below. the capital of the owner was $65,000 on january 1. the owner invested an additional $10,000 during the year.

accounts	amounts	accounts	amounts
accounts payable	$ 4,375	spa operating expense	$23,760
accounts receivable	8,490	office expense	2,470
cash	???	spa supplies	9,230
fees earned	98,435	wages expense	26,580
spa furniture and equipment	56,000	drawing	38,170
computers	2,130

required:
prepare a balance - sheet for the year ended december 31. refer to the lists of accounts, labels, and amount descriptions for the exact wording of the answer choices for text entries. be sure to complete the statement heading.

Accepted Answer

# Explanation:
## Step1: Calculate net income
Net income = Fees earned - (Spa operating expense + Office expense+Wages expense) = 98435-(23760 + 2470+26580) = 98435 - 52810=45625
## Step2: Calculate ending owner's capital
Beginning owner's capital = 65000, Additional investment = 10000, Drawing = 38170
Ending owner's capital=Beginning owner's capital+Additional investment + Net income - Drawing = 65000+10000 + 45625-38170 = 82455
## Step3: Calculate total assets
Total assets = Accounts receivable+Cash+Spa furniture and equipment+Computers+Spa supplies
We need to find Cash. Using the accounting equation Assets = Liabilities + Owner's equity. First, find total liabilities and owner's equity.
Total liabilities = Accounts payable = 4375
Total liabilities and owner's equity = 4375+82455 = 86830
Let Cash be $x$. Then $x+6490 + 56000+2130+9230=86830$
$x+73850 = 86830$
$x=86830 - 73850=12980$
Total assets = 6490+12980+56000+2130+9230 = 86830

Balance Sheet for Rocky's Day Spa
December 31

| Assets | Amount | Liabilities and Owner's Equity | Amount |
|--|--|--|--|
| Accounts receivable | 6490 | Accounts payable | 4375 |
| Cash | 12980 | Owner's capital | 82455 |
| Spa furniture and equipment | 56000 |  |  |
| Computers | 2130 |  |  |
| Spa supplies | 9230 |  |  |
| Total assets | 86830 | Total liabilities and owner's equity | 86830 |

# Answer:
Balance Sheet for Rocky's Day Spa
December 31

| Assets | Amount | Liabilities and Owner's Equity | Amount |
|--|--|--|--|
| Accounts receivable | 6490 | Accounts payable | 4375 |
| Cash | 12980 | Owner's capital | 82455 |
| Spa furniture and equipment | 56000 |  |  |
| Computers | 2130 |  |  |
| Spa supplies | 9230 |  |  |
| Total assets | 86830 | Total liabilities and owner's equity | 86830 |

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Question

Explanation:

Step1: Calculate net income

Step2: Calculate ending owner's capital

Step3: Calculate total assets

Answer:

Assets	Amount	Liabilities and Owner's Equity	Amount
Cash	12980	Owner's capital	82455
Spa furniture and equipment	56000
Computers	2130
Spa supplies	9230
Total assets	86830	Total liabilities and owner's equity	86830