Exercise 2 Using the following end of month account balances, create a Multi-ste
ID: 2443582 • Letter: E
Question
Exercise 2Using the following end of month account balances, create a Multi-step Income Statement and a Balance Sheet with the proper format and in the proper order. Make sure to create your solution in Excel, save it with your name in the file name, and submit it the assignment.
Mortgage Payable $70,000
Cost of Goods Sold $45,000
Common Stock $27,000
Cash $30,000
Sales $95,000
Land $35,000
Accrued Expense $25,000
Accounts Payable $15,000
Prepaid Expense $10,000
Accounts Receivable $25,000
Building $80,000
Inventory $ 6,000
2 yr Notes Payable $14,000
BOY Ret Earnings $ 8,000
Returns $ 7,000
Wages $12,000
Rent $11,000
Losses $13,000
Interest Revenue $ 9,000
Accum Depreciation $20,000
Depreciation Exp $ 5,000
Dividends $ 4,000
Explanation / Answer
Income Statement
Sales $95,000
Less : Returns $7,000
Net Sales $88,000
Cost of Goods Sold $45,000
Gross profit $43,000
Wages $12,000
Rent $11,000
Depreciation Exp $5,000
Total Operating Expenses $28,000
Operating Profit $15,000
Non Operating Income
Interest Revenue $9,000
Net Income $24,000
Balance Sheet
As on xx/xx/xxxx
Assets
Current Assets
Cash $30,000
Prepaid Expense $10,000
Accounts Receivable $25,000
Inventory $6,000
Total Current Assets $71,000
Property & Equipments
Land $35,000
Building $80,000
Less: Acc.Depr. $20,000 $60,000
Total Fixed Assets $95,000
Total Assets $166,000
Liabilities
Current Liabilities
Accrued Expense $25,000
Accounts Payable $15,000
Total Current Liabilities $40,000
Long Term Debt
Mortgage Payable $70,000
2 yr Notes Payable $14,000
Total Long Term Debt $84,000
Shareholders’ Equity
Common Stock $27,000
BOY Ret Earnings $8,000
Add: Income $24,000
$32,000
Less: Losses ($13,000)
Less: Dividends ($4,000) $15,000
Total Liabilities &
Shareholders’ Equity $166,000
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