12 L03 4 (Prepare Financial Statements) Santo Design was founded by Thomas Grant
ID: 2342880 • Letter: 1
Question
12 L03 4 (Prepare Financial Statements) Santo Design was founded by Thomas Grant in January 2011 is the adjusted trial balance as of December 31, 2017 Presented below SANTO DESIGN ADIUSTED TRIAL BALANCE DECEMBER 31, 2017 511.350 21,500 5,000 2.300 0,000 Accounts Receivable Prepaid Insarance Accumulated Depreciation-Equipment Accounts Payable Interest Payable Notes Payable Unearned Service Revenue Salaries and Wages Payable Common Stock Retained Eamings Service Revenue 35,000 5,000 150 5,000 5,600 1,300 10,000 3,500 61,500 Snlurien a s wage Bpense 11.300 Interest Expense Depreciation Expense Supplies Expense Rent Expense 7,000 3,400 4,000 127,080 127 050 Prepare an income statement and a statement of retained earnings for the year ending December 31, 2017, and an unclassified balance sheet at December 31. b) Answer the following questions. (1) IE the note has been outstanding 6 months, what is the annual interest rate on that note? (2) 1 the company paid $17 ,500 in salaries in 2017, what was the balance in Salaries and Wages Payable on December 31, 20162 E3-13 LO5,9) (Closing Entries) The adjusted trial balance at the end of its fiscal year, $24,000, and Sales Discounts $15,000 of Lopez Company shows the following data pertaining to sales October 31, 2017:Sales Revenue $800,000, Delivery Expense $12,000, Sales Returns and Allowances Instructions (a) Prepare the revenues section of the income statement b) Prepane separate closing entries for (1) sales and (2) the contra accounts to sales 53-14 (L09) (Closing Entries) Presented below is information related to Gonzales Corporation for the month of January 2017 Cost of goods sold Delivery expense Insarance expense Rent experae 00 Salaries and wages expense Sales discounts Sales returms and allowances S60X 8,000 13,000 350,000 Sales revervue Instructions Prepare the necessary closing entriesExplanation / Answer
a1). Income Statement ;-
a2) Statement of Retained Earnings :-
a3) Unclassified Balance Sheet :-
b1) Annual Interest = Interest Paid in Current Year - Outstanding Interest
= $150 + $150
= $300
Rate of Interest = Annual Interest amount / amounts of Note Payable
= $300 / $5000
= 0.06 or 6%
b2).
Payment for the current year Expense = Salaries and Wages Expense-Salaries and Wages
Payable Closing Balance
= $11300 - $1300
= $10000
Salary Expense Payment for 2016:-
Payment for the last year expense = actual Payment made in 2017 - Payment for the current
year Expense
= $17500 - $10000
= $7500
Particular Amount($) Amount($) Service Revenue (A) 61500 Less : Operating Expenses Salaries and Wages Expense 11300 Incurance Expense 850 Depreciation Expenses 7000 Supplies Expense 3400 Rent Expense 4000 Total Operating Expense (B) 26550 (26550) Operating Income (A-B) 34950 Less : Other Expenses Interest Expense 150 (150) Net Income 34800Related Questions
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