Blazer Company - Balance Sheet As of 12/31/2014 Assets Current Assets Cash $ 50,
ID: 2496707 • Letter: B
Question
Blazer Company - Balance Sheet
As of 12/31/2014
Assets
Current Assets
Cash
$ 50,000
Accounts Receivable
$ 35,000
Total Current Assets
$85,000
Long-term Investments
Investments in Hokie Co. - AFS
$25,000
Property Plant and Equipment
Printing Equipment
$100,000
less Accumulated Depreciation
$ (40,000)
$60,000
Building
$ 110,000
less Accumulated Depreciation
$ (3,667)
$106,333
Intangible Assets
Trademark
$10,000
Total Assets
$ 286,333
Liabilities and Stockholders’ Equity
Current Liabilities
Accounts Payable
$115,000
Unearned Revenue
$45,000
Total Current Liabilities
$160,000
Total Liabilities
$ 160,000
Stockholder's Equity
Capital Stock:
Common Stock ($1 par value 10,000 shares issued)
$10,000
Additional Paid in Capital
$50,000
Total Paid in Capital
$ 60,000
Retained Earnings
$ 66,333
Total Stockholder's Equity
$126,333
Total Liabilities and Stockholder's Equity
$286,333
The Following Events Happened in 2015
On Jan. 1 Blazer Co. issued 1000 shares of 6% $10 par preferred stock for $20,000.
Blazer Co. had $150,000 in sales ($100,000 cash and $50,000 on account).
On Jan. 1 Blazer Co. paid $20,000 to rent a building for the next 12 months
Blazer Co. purchased supplies for $10,000 on account
Blazer Co. collected $35,000 in cash for settlement of outstanding accounts receivable
Blazer Co. provided services to earn all unearned revenue in 2015.
At the end of the year only $2000 of supplies remained
On 12-31 Blazer Company declared and paid preferred dividends
Other Information:
The Building has a useful life of 10 years and a salvage value of 10,000. The company uses straight line depreciation.
The Printing Equipment had a useful life of 10 years and a salvage value of 50,000. The company uses straight line depreciation.
Blazer Co's Income Tax Rate is 30 percent and taxes will not be paid until 2016.
Instructions: Using this information, prepare the 2015 Income Statement and Balance.
Blazer Company - Balance Sheet
As of 12/31/2014
Assets
Current Assets
Cash
$ 50,000
Accounts Receivable
$ 35,000
Total Current Assets
$85,000
Long-term Investments
Investments in Hokie Co. - AFS
$25,000
Property Plant and Equipment
Printing Equipment
$100,000
less Accumulated Depreciation
$ (40,000)
$60,000
Building
$ 110,000
less Accumulated Depreciation
$ (3,667)
$106,333
Intangible Assets
Trademark
$10,000
Total Assets
$ 286,333
Liabilities and Stockholders’ Equity
Current Liabilities
Accounts Payable
$115,000
Unearned Revenue
$45,000
Total Current Liabilities
$160,000
Total Liabilities
$ 160,000
Stockholder's Equity
Capital Stock:
Common Stock ($1 par value 10,000 shares issued)
$10,000
Additional Paid in Capital
$50,000
Total Paid in Capital
$ 60,000
Retained Earnings
$ 66,333
Total Stockholder's Equity
$126,333
Total Liabilities and Stockholder's Equity
$286,333
Explanation / Answer
Solution;
INCOME STATEMENT
SALES
195,000
OPENING
-
ADD PURCHASE
10,000
LESS : CLOSING STOCK
2,000
COGS
8,000
GROSS PROFIT
187,000
DEPRECIATION
15,000
RENT
20,000
EBT
152,000
TAX
45,600
NET INCOME
106,400
LESS DIVIDEND (10000*.06)
600
RETAINED
105,800
Assets
Current Assets
Cash
184,400
Accounts Receivable
50,000
INVENTORY
2,000
Total Current Assets
236,400
Long-term Investments
Investments in Hokie Co. - AFS
25,000
Property Plant and Equipment
Printing Equipment
100,000
less Accumulated Depreciation (40000+5000)
- 45,000
55,000
Building
110,000
less Accumulated Depreciation (3667+10000)
- 13,667
96,333
Intangible Assets
Trademark
10,000
Total Assets
422,733
Liabilities and Stockholders’ Equity
Current Liabilities
Accounts Payable (115000+10000 credit purchase)
125,000
Unearned Revenue (45000-45000)
-
TAX PAYABLE
45,600
Total Current Liabilities
170,600
Total Liabilities
170,600
Stockholder's Equity
Capital Stock:
Common Stock ($1 par value 10,000 shares issued)
10,000
Common Stock ($10 par value 1000 shares issued)
10,000
Additional Paid in Capital (50000+10000)
60,000
Total Paid in Capital
80,000
Retained Earnings (66333+105800)
172,133
Total Stockholder's Equity
252,133
Total Liabilities and Stockholder's Equity
422,733
CASH balance
Opening balance
50000.00
cash sales
100000.00
preference shares issued
20000.00
rent paid
-20000.00
Collection
35000.00
Dividend
-600.00
closing balance
184400.00
Accounts Receivable
Opening balance
35000.00
credit sales
50000.00
Collection
-35000.00
closing balance
50000.00
INCOME STATEMENT
SALES
195,000
OPENING
-
ADD PURCHASE
10,000
LESS : CLOSING STOCK
2,000
COGS
8,000
GROSS PROFIT
187,000
DEPRECIATION
15,000
RENT
20,000
EBT
152,000
TAX
45,600
NET INCOME
106,400
LESS DIVIDEND (10000*.06)
600
RETAINED
105,800
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