Determined that 4.50 percent of the ending accounts receivable balance would be
ID: 2510748 • Letter: D
Question
Determined that 4.50 percent of the ending accounts receivable balance would be uncollectible.
Prepare an income statement, statement of changes in stockholders’ equity, balance sheet, and statement of cash flows for 2016. (Statement of Cash Flows and Balance Sheet only: Items to be deducted must be indicated with a minus sign. Round your answers to the nearest whole dollar.)
1. The business was started when it acquired $51,000 cash from the issue of common stock. 2. Northwest purchased $171,000 of merchandise for cash in 2016. 3. During the year, the company sold merchandise for $199,490. The merchandise cost $109,720. Sales were made under the following terms:Explanation / Answer
Answer
General Journal
Dr ($)
Cr ($)
Working , if any
Cash
51000
[received]
Common Stock
51000
Inventory
171000
[purchased]
Cash
171000
Cash
186254
[45950 + (142080-1.25%]
Accounts receivables
11460
[given]
Charges
1776
[142080 x 1.25%]
Sales Revenue
199490
Cost of Goods Sold
109720
[given]
Inventory
109720
Cash
10543
[cash received]
Accounts receivables
10543
Selling & administrative expenses
43494
Cash
43494
Bad Debt expenses
41
[11460-10543] x 4.5%
Allowances for doubtful accounts
41
Sales Revenue
199490
(-) Cost of Goods Sold
109720
Gross Profits
$89770
(-) Charges
1776
(-) Bad debt expenses
41
(-) Selling & admin expenses
43494
Net Income
$44,459
Common Stock
Retained Earnings
Total Stockholder's equity
Beginning Balance
0
0
0
Add: Issue
51000
51000
Add: Net Income
44459
44459
Ending cash balance
$51000
$44459
$95459
ASSETS
Current Assets:
Cash [51000-171000+186254+10543-43494]
33303
Inventory
61280
Accounts receivables
917
Less: Allowance for doubtful accounts
41
876
Total Current Assets/ASSETS
$95,459
LIABILITIES & STOCKHOLDERS Equity
Common Stock
51000
Retained Earnings
44459
Total Liabilities & Stockholder's Equity
$95,459
Net Income
44459
Increase in Inventory
-61280
Increase in Accounts receivables
-876
A. Cash flow from Operating Activities
-17697
B. Cash flow from Investing Activity
0
Cash flow from Financing Activity
Issue of Common Stock
51000
C. Cash flow from Financing activities
51000
Increase in Cash
$33,303
Add: Beginning cash balance
0
Cash at the end
$33,303
General Journal
Dr ($)
Cr ($)
Working , if any
Cash
51000
[received]
Common Stock
51000
Inventory
171000
[purchased]
Cash
171000
Cash
186254
[45950 + (142080-1.25%]
Accounts receivables
11460
[given]
Charges
1776
[142080 x 1.25%]
Sales Revenue
199490
Cost of Goods Sold
109720
[given]
Inventory
109720
Cash
10543
[cash received]
Accounts receivables
10543
Selling & administrative expenses
43494
Cash
43494
Bad Debt expenses
41
[11460-10543] x 4.5%
Allowances for doubtful accounts
41
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