Below are the accounts of Giordanos Pizza. The company has just comple

QUESTION

Below are the accounts of Giordanos Pizza. The company has just completed its first year of operations ended September 30, 2010.Accounts Payable .$10,500Accounts Receivable 13,200Cash .. 2,600Delivery Truck Rent Expense .. 7,200Equipment . $6,300Equipment Rental Expense 2,900Marketing Expense 1,500Owners Capital 2,000Pizza Revenue 82,000Salaries Expense 56,000Salaries Payable . 700Supplies . 400Supplies Expense .. 4,100Withdrawals . 1,000*Represents the initial investment by the ownerRequired 1. Prepare the income statement, statement of owners equity, and balance sheet for Giordanos Pizza.2. Why would the owner of Giordanos Pizza set his business up as a sole proprietorship and not a partnership? Discuss the advantages of the two forms of business organizations.
Answer to part 1 : Income Statement Pizza Revenue 82,000 Salaries Expense 56,000 Delivery Truck Rent Expense 7,200 Equipment Rental Expense 2,900 Marketing Expense 1,500 Supplies Expense 4,100 Total Expenses 71,700 Net Income 10,300 Statement of Owners equity Owners Capital 2000 Less: Withdrawals 1000 Add: Net Income 10300 11300 Balance Sheet Assets Amount Liabilities Amount Accounts Receivable 13,200 Accounts Payable 10,500 Cash 2,600 Salaries Payable 700 Equipment 6,300 Owners Capital 11,300 Supplies 400 22,500 22,500 Answer 2: Advantages of Sole Proprietorship 1 Sole proprietorship is easy and inexpensive

o create. 2 The owner has complete authority over all business activities. 3 It is the least regulated form of business ownership. 4 The business pays no taxes; income is taxed at the personal rate of the owner. Advantages of partnership 1 Partnerships are inexpensive to create. 2 General partners have complete control. 3 Partners can share ideas. Partners can secure investment capital more easily and in greater amounts.

ANSWER:

CLICK REQUEST FOR  AN EXPERT SOLUTION