Jan Nab is the sole owner of Deer Park, a public camping ground near the Lake Mead National Recreation Area. Jan has compiled the following financial information as of December 31, 2010.

Question

Revenues during 2010—camping fees $140,000 Market value of equipment $140,000
Revenues during 2010—general store 50,000 Notes payable 60,000
Accounts payable 11,000 Expenses during 2010 150,000
Cash on hand 23,000 Supplies on hand 2,500
Original cost of equipment 105,500

Instructions

(a) Determine Jan Nab's net income from Deer Park for 2010.

$

(b) Complete the balance sheet for Deer Park as of December 31, 2010. (List assets in order of liquidity and liabilities from largest to smallest eg 10, 5, 3, 2.)

Deer PARK
Balance Sheet
December 31, 2010For the year ended December 31, 2010
Assets

Accounts payableExpensesCamping revenuesStore revenuesJan Nab,CapitalCashSuppliesEquipmentNotes payable $
SuppliesAccounts payableJan Nab,CapitalCashCamping revenuesStore revenuesExpensesEquipmentNotes payable
Store revenuesEquipmentCashCamping revenuesSuppliesExpensesNotes payableAccounts payableJan Nab,Capital

Total assets $

Liabilities and Owner's Equity

Liabilities
ExpensesAccounts payableStore revenuesJan Nab,CapitalSuppliesNotes payableCamping revenuesCashEquipment $
SuppliesEquipmentNotes payableStore revenuesExpensesAccounts payableCashJan Nab,CapitalCamping revenues

Total Liabilities
Owner's equity
EquipmentExpensesCamping revenuesStore revenuesJan Nab,CapitalCashSuppliesNotes payableAccounts payable

Total liabilities and owner's equity $

Answer 1

(a) To determine Jan Nab's net income for 2010, subtract the expenses from the total revenues:

Total revenues = Camping fees + General store revenues = $140,000 + $50,000 = $190,000
Expenses = $150,000

Net income = Total revenues - Expenses = $190,000 - $150,000 = $40,000.

(b) Now, let's complete the balance sheet for Deer Park as of December 31, 2010.

Deer PARK
Balance Sheet
December 31, 2010

Assets

Cash $23,000
Supplies $2,500
Equipment (at original cost) $105,500

Total assets $131,000

Liabilities and Owner's Equity

Liabilities
Notes payable $60,000
Accounts payable $11,000

Total Liabilities $71,000

Owner's Equity
Jan Nab, Capital (Net income + Original equity) $40,000 + ($131,000 - $71,000) = $100,000

Total liabilities and owner's equity $171,000