Current assets Cash Accounts Receivable Less: Allowance for Doubtful Accounts Me

Question

Current assets Cash Accounts Receivable Less: Allowance for Doubtful Accounts Merchandise Inven Prepaid Insurance Prepaid Rent Store Supplies Office Supplies Note Receivable Interest Receivable Prepaid Advertising S 49,800.00 S 77,450.00 S 7.250.00 S 160,500.00 S 18,000.00 S 5,100.00 S 1,250.00 S 1,250.00 S 24,000.00 S 600.00 S 30,000.00 360,700.00 Total current assets Property, plant, and equipment Store Equipment Office Equipment Less: Accumulated Depreciation-Store Equipment S 175,000.00 S 80,000.00 255,000.00 $ 40,050.00 214,950.00 575,650.00 Total Assets Liabilities and Stockholders Equity Current Liabilties Accounts Payable Salaries Payable Interest Payable Uneamed Rent $85,200.00 $10,300.00 $16,667.00 112,167.00 Total Current Liabilities Long-term liabilities Note Payable (final payment due 2020) $146,000.00 258,167.00 Total Liabilities Stockholder's equity Common Stock Retained Earnings Less: Dividends $60,000.00 $ 255,517.00 $35,000.00 $280,517.00 Total stockholder's equity Total liabilities and stockholder's equit 538,684

Explanation / Answer

Balance Sheet

Current assets;

Cash

$49800

Accounts receivable

$77450

Less: Allowance for doubtful accounts

($7250)

Mercandise inventory

$160500

Prepaid insurance

$18000

Prepaid rent

$5100

Store supplies

$1250

Office supplies

$1250

Note receivable

$24000

Interest receivable

$600

Prepaid advertising

$30000

Total cash assets

$360700

Property plant & equipment;

Store equipment

$175000

Office equipment

$80000

Less: Accumulated depreciation

($40050)

$214950

Total assets

$575650

Liabilities and Stockholders’ equity;

Current liabilities;

Accounts payable

$85200

Salaries payable

$10300

Interest payable

------

Unearned rent

$16667

Unearned consulting revenue

$6400

Total current liabilities

$118567

Long-term liabilities;

Note payable

$146000

$146000

Total liabilities

$264567

Stockholders’ equity;

Common stock

$60000

Retained earnings

$251083

Total stockholders’ equity

$311083

Total liabilities and stockholders’ equity

$575650

Working Note & Explanation;

Let’s calculate net income for the year;

Income Statement

Sales revenue

$808950

Sonsulting revenue

$17600

Rent revenue

$3333

Interest revenue

$600

$830483

Sales returns & allowances

($11700)

Sales discount

($7200)

Cost of gooods sold

($457200)

Sales salary expenses

($99450)

Advertising expenses

($18000)

Store supplies expense

($3000)

Miscellaneous selling expense

($2600)

Office salaries expenses

($39500)

Rent expense

($5100)

Office supplies expenses

($5250)

Miscellaneous administrative expense

($1650)

Bad debt expense

($5250)

Net income

$174583

Now let’s calculate balance of retained earnings;

Income Statement

Opening retained earnings

$111500

Add: Net income

$174583

Less: Dividends

($35000)

Ending retained earnings

$251083

Balance Sheet

Current assets;

Cash

$49800

Accounts receivable

$77450

Less: Allowance for doubtful accounts

($7250)

Mercandise inventory

$160500

Prepaid insurance

$18000

Prepaid rent

$5100

Store supplies

$1250

Office supplies

$1250

Note receivable

$24000

Interest receivable

$600

Prepaid advertising

$30000

Total cash assets

$360700

Property plant & equipment;

Store equipment

$175000

Office equipment

$80000

Less: Accumulated depreciation

($40050)

$214950

Total assets

$575650

Liabilities and Stockholders’ equity;

Current liabilities;

Accounts payable

$85200

Salaries payable

$10300

Interest payable

------

Unearned rent

$16667

Unearned consulting revenue

$6400

Total current liabilities

$118567

Long-term liabilities;

Note payable

$146000

$146000

Total liabilities

$264567

Stockholders’ equity;

Common stock

$60000

Retained earnings

$251083

Total stockholders’ equity

$311083

Total liabilities and stockholders’ equity

$575650

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