Using the account listing in the photos, you are to create standard financial st

Question

Using the account listing in the photos, you are to create standard financial statements for the corporation, namely: 1) Income Statement, 2) Retained Earnings Statement, 3) Statement of Stockholders’ Equity, and 4) Balance Sheet. Note: a Microsoft Excel spreadsheet of this data will be made available to you. Also, in preparation for the financial statements, you may want to prepare an unadjusted Trial Balance, as the data provided is pre-closing December 31, 2015.

Fort Myers General Merchandise Co. Data provided in Grey Chart of Accounts and balances as of 12/31/2015 Selected Balances provided as of 12/31/2014 Balances Selected Balances Acct No. Description 12/31/2015 12/31/2014 1100 Cash                 84,500                 73,050 1120 Accounts Receivable               247,450               253,975 1150 Merchandise Inventory               550,000               383,475 1160 Prepaid Insurance                    4,800                    2,400 1170 Store Supplies                    4,000                       750 1230 Store Equipment               569,500 1240 Accumulated Depreciation—Store Equipment                 70,700                 56,700 2100 Accounts Payable               209,000               198,525 2110 Salaries Payable                 47,750                 42,625 2210 Long-term Notes               300,000               300,000 3100 Common Stock (10,000 shares issued, $25 Par)               250,000               250,000 3110 Capital in Excess of Par Value               100,000               100,000 3120 Dividends Paid               100,000 3200 Retained Earnings               335,300               335,300 4100 Sales           5,032,350           4,225,135 4110 Sales Returns and Allowances               113,700                 15,955 4120 Sales Discounts                 61,600                 35,455 5100 Cost of Merchandise Sold           3,012,150           2,300,422 5200 Sales Salaries Expense               727,800 5210 Advertising Expense               292,000 5220 Depreciation Expense                 14,000 5230 Store Supplies Expense                    9,800 5290 Miscellaneous Selling Expense                 12,600 5300 Office Salaries Expense               417,700 5310 Rent Expense                 88,700 5320 Insurance Expense                 12,000 5390 Miscellaneous Administrative Expense                    7,800 5650 Interest Expense                 15,000 Total Assets at 12/31/2014           1,125,138

Explanation / Answer

1)

2)

Net profit

The income statement is as follows: Particulars Amount Sales 5032350 Less: Sales returns 113700 Sales discount 61600 Net sales 4857050 Less: Cost of merchandise sold 3012150 Salaries expense 727800 Advertising expense 292000 Depreciation expense 14000 Stores supplies expense 9800 Misc. selling expense 12600 Office salaries expense 417700 Rent expense 88700 Insurance expense 12000 Misc. admin expense 7800 Interest expense 15000 Total costs 4609550 Net profit 247500

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