1. Use the following information, to prepare Aboni\'s 2016 financial statements

Question

1. Use the following information, to prepare Aboni's 2016 financial statements ending October 31, 2016. (37 MARKS) 800 CL Accounts payable CA Accounts receivables C | Accrued expenses payable 15 100,000 | PP Accumulated-depreciation 550,000 A 250,000 Administrative expenses Plant,property: andequipment 2.350 000 HE /A 930,000 x 525,000 S E Common stock CA Cash Cost.of-sales Depreciation Dividends paid Income tax expense 3,000,000 55,000 50,000 170,000 165,00 /A 450,000! A Patents CA Inventories LL- 1 Long-termborrowings -610,000 | L CA Marketable securities Other expenses Otherincome 60,000 55,000 40,000 cA Prepaid exgonses Revenue Delivery expenses SE 4 Retained earnings tbeginning) Short-term borrowings 250,000xL Required: Prepare the following financial statements a. Income Statement b. Statement of Retained Earnings c. Balance Sheet (12 marks) (4 marks) (21 marks)

Explanation / Answer

Income Statement of Aboni For the year ended 31 October 2016 Net Sales 40,00,000 Cost of Sales (30,00,000) Gross Profit 10,00,000 Selling, General and Administrative Expenses: Delivery Expenses (2,50,000) Administrative Expense (2,50,000) Depreciation and amortisation expense (55,000) Operating Income 4,45,000 Other Expenses (55,000) Other Income 40,000 Income (Loss) from Continuing Operations before Income Taxes 4,30,000 Income Tax Expense (1,70,000) Net Income (Loss) 2,60,000 Statement of Retained Earning of Aboni Retained Earning at 31 October 2015 10,00,000 Net income for the year ended October 31, 2016 2,60,000 Dividends paid to shareholders (50,000) Retained earnings at October 31, 2016 12,10,000 Balance Sheet as at 31 October 2016 of Aboni Assets Current Asset Cash and Cash Equivalents             5,25,000 Marketable Securities                60,000 Accounts Receivable             1,50,000 Inventories             4,50,000 Prepaid Expenses                30,000 Total Current Asset          12,15,000 Propety, Plant and Equipment          18,00,000 Intangible Assets             1,65,000 Other Assets                          -   Total Assets          31,80,000 Liability and Shareholders' Equity Current Liabilities Loans and notes payable             2,50,000 Accounts Payable                80,000 Accrued Liabilities             1,00,000 Total Current Liabilities             4,30,000 Long Term Debt             6,10,000 Total Liabilities          10,40,000 Shareholders' Equity Common Stock             9,30,000 Retained Earning          12,10,000 Total Shareholders' Equity          21,40,000 Total Liabilities and Shareholders' Equity          31,80,000

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