Accounting Cycle Practice Problem as follows The Gomez Company uses the perpetua

Question

Accounting Cycle Practice Problem as follows The Gomez Company uses the perpetual inventory procedure. The 2013 balance sheet of the Gomcz Company is Gomez Company Balance Sheet December 31, 2013 Assets 30,000 Cash Accounts receivabke, net of alowance for doubtful accounts Inventory Prepaid Expenses 100,000 10,000 210,000 Total current assets Land 30,000 S 240,000 s (80,000) S Buikdings and equipment Less: Accumulated depreciation Total assets 160,000 400,000 Liabilities and Stockholders' Equity Accounts payable Income taxes payable Accrued expeneses payable 40,000 30,000 15,000 85,000 Total current liabiltes Bonds payable, 9% due 2040 100,000 185,000 Total liabilties Stockhokders' Equity Capial Stock 150,000 $20 par, 7.500 shares outstanding Retained canings 65.000 215,000 Total stockhokders' equity Total labilities and stockholders' equity 400,000

Explanation / Answer

Cash Accounts receivable Sales Revenue 30000 220000 70000 490000 500000 490000 10000 500000 12000 130000 25000 65000 10000 48000 80000 500000 Invenory Accounts Payable Cost of Goods Sold 100000 230000 220000 40000 230000 225000 225000 95000 45000 230000 Prepaid Expenses Accrued expense Payable Miscellaneous Expenses 10000 8000 130000 15000 8000 10000 135000 12000 20000 8000 Income Tax Payable Accumulated Depreciation Bond Interest Expenses 25000 30000 80000 12000 30000 40000 35000 120000 12000 Building and Equipment Land Payroll Expenses 240000 30000 135000 65000 305000 30000 135000 Bonds Payable Capital Stock Depreciation Expenses 100000 150000 40000 100000 150000 40000 Retained Earnings Dividends Income Tax Expenses 65000 10000 30000 65000 10000 30000 Income Statement Revenues: Sales 500000 Cost of Goods Sold 230000 Gross Profit 270000 Expenses: Misc. Expenses 8000 Bond Interest expense 12000 Payroll expense 135000 Depreciation expense 40000 Income before tax 75000 Income Tax @ 40% 30000 Income after tax 45000 Statement of Retained Earnings Retained Earnings, 1/1/2014 65000 Add: Net Income 45000 Less: Dividends 10000 Retained Earnings, 31/12/2014 100000 Balance Sheet Assets Current Assets: Cash 48000 Accounts Receivable 80000 Inventory 95000 Prepaid Expense 12000 Total Current Assets 235000 Property, Plant and equipment Land 30000 Building and Equipment 305000 Less: Accumulated Depreciation -120000 Total PPE, net 215000 Total Assets 450000 Liabilities Current Liabilities: Accounts Payable 45000 Accrued expenses payable 20000 Income tax payable 35000 Total Current Liabilities 100000 Bonds Payable 100000 Stockholders' Equity Capital Stock 150000 Retained Earnings 100000 Total Stockholders' Equity 250000 Total Liabilities and stockholders' equity 450000

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