From the following information for Helming, Inc., prepare financial statements (
ID: 2488481 • Letter: F
Question
From the following information for Helming, Inc., prepare financial statements (Income Statement, Balance Sheet and Statement of Owners’ Equity for the year ending December 31, 2015.
Cash $58,000
Accounts Receivable 80,000
Allowance for Doubtful Accounts 4,000
Inventory 100,000
Building 200,000
Equipment 80,000
Accumulated Depreciation 56,000
Security Deposit 3,000
Accounts Payable 12,000
Salary Payable 4,000
Taxes Payable 6,000
Note Payable-Long Term 100,000
Common Stock $1 par 5,000
Capital in Excess of Par 45,000
Preferred Stock 20,000
Retained Earnings 279,000
Treasury Stock 10,000
Sales 610,000
Cost of Sales 300,000
Salary Expense 100,000
Rent Expense 36,000
Depreciation Expense 28,000
Office Expense 6,500
Interest Expense 5,500
Tax Expense 40,200
Helming has 80,000 shares of common stock outstanding on December 31, 2014. They sold 1,000 shares for $20 each on June 30, 2015. The Beginning Retained Earnings was $175,000. Helming, declared and paid a $5,000 dividend on December 15, 2015 on the common stock. There are 200 shares of preferred stock outstanding issued at $100 per share. The preferred stock carries a 10% dividend and each share is convertible into one share of common stock. The Note Payable is payable at $20,000 per year.
Explanation / Answer
Helming Inc. All Amounts in $ Income Statement for the year ended 31 December 2015 Sales 610000 Cost of Sales 300000 Contribution Margin 310000 Gain on Sale of Treasury Stock 10000 320000 Salary Expense 100000 Rent Expense 36000 Depreciation Expense 28000 Office Expense 6500 Interest Expense 5500 176000 Net Profit before Taxes 144000 Income Tax Expense 40200 Net Profit after Taxes 103800 Statement of Owners' Equity as on 31 December 2015 Common Stock 5,000 Equity Shares of $ 1 each 5000 75,000 Equity Shares issued at 0.60 cents each 45000 50000 Preferred Stock 200 Shares @ $ 100 per share 20000 (Convertible into 200 Shares of Common Stock) Retained Earnings Opening Balance 175000 Add : Net Income for the year 103800 278800 Less : Dividend on Preferred Stock 2000 Less : Dividend on Common Stock 5000 7000 Closing Balance 271800 Total Owners' Equity 341800 Balance Sheet as on 31 December 2015 Assets Current Assets Cash 53000 Accounts Receivable 80000 Less : Allowance for Doubtful Accounts 4000 76000 Security Deposit 3000 Inventory 100000 Total Current Assets 232000 Fixed Assets Building 200000 Equipment 80000 Accumulated Depreciation 56000 24000 Total Assets 456000 Liabilities Current Liabilities Accounts Payable 12000 Salary Payable 4000 Dividends on Preferred Stock 6000 Taxes Payable 42200 Total Current Liabilities 64200 Long-Term Liabilities Notes Payable (due in 5 years) 100000 Shareholders' Equity Common Stock 50000 Preferred Stock 20000 Retained Earnings 221800 Total Liabilities and Shareholders' Equity 456000
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