Using the given Trial Balance and other information, create a Balance Sheet, Inc
ID: 2575434 • Letter: U
Question
Using the given Trial Balance and other information, create a Balance Sheet, Income Statement and Statement of Cash Flows for the year ended 12/31/2018.
Big Time Cupcake Company Trial Balance As of December 31 2017 and 2018 12/31/17 12/31/18 Debit Credit Debit Credit 15,000 25,000 10,000 Cash Accounts receivable Investment in Stock Market Allowance for doubtful accounts Cupcake invento Furniture and fixtures Accumulated depreciation Accounts payable Wages payable Notes payable Common stock Retained earnings Cupcake sales Cost of good sold Wages Insurance Taxes Rent Depreciation Bad debt expense Gain/loss on sale of fixed assets 35,500 17,500 20,000 2,000 3,000 45,000 72,000 52,000 80,000 20,000 7,500 2,000 80,000 25,000 30,500 24,500 9,000 1,000 72,000 30,000 28,500 125,000 62,500 12,500 1,000 2,000 7,500 5,000 1,000 3,500 167,000 167,000 296,500 296,500 The company purchased $15,000 of fixed assets The company paid $2,000 of dividends The company paid off $8,000 of long term debt The company sold a fixed assets, original cost was $7,000, accumulated depreciation was $500 and they received $10,000 in cash for the assetExplanation / Answer
Answer
Working
Income Statement
Revenues
Cupcake Sales
125000
Gain/Loss on sale of fixed assets
3500
A
Total Revenues
128500
Expenses
Cost of Goods Sold
62500
Wages payable
12500
insurance
1000
Rent
7500
Depreciation
5000
Bad Debt expense
1000
B
Total expenses
89500
C=A-B
Net Income before Taxes
39000
D
Taxes
2000
E=C-D
Net Income after Taxes
37000
Working
Balance Sheet
Shareholder's Equity and Liabilities
Amount
Shareholder's Equity
Common Stock
30000
Retained earnings
28500
Add: Net Income
37000
65500
A
Total Shareholders' Equity
95500
Liabilities
Accounts payable
9000
Wages payable
1000
Notes Payable
72000
B
Total Liabilities
82000
C=A+B
Total Shareholder's Equity and Liabilities
177500
Assets
Amount
Fixed Assets
Furniture and Fixtures
80000
A
(Less) Accumulated Depreciation
(24500)
55500
Current Assets
Cash
35500
Accounts receivables
17500
(Less) Allowance
(3000)
14500
Cupcake Inventory
52000
Investment in Stock Market
20000
B
Total Current Assets
122000
C=A+B
Total Assets
177500
A. Cash Flow from Operating Activities
Net Income after Taxes
37000
Adjustments:
Depreciation
5000
Gain on Sale of Assets
(3500)
Adjusted Income
38500
Add:
Decrease in Current Assets
Accounts Receivables
7500
Increase in Current Liabilities
Allowances for Debts
1000
Accounts payable
1500
10000
Less:
Increase in Current Assets
Investment in Stock Market
10000
Cupcake Inventory
7000
Decrease in Current Liabilities
Wages payable
1000
18000
Net cash Flow from Operating Activities (A)
30500
B. Cash Flow from Investing Activities
Purchase of Fixed Assets
(15000)
Sale of Fixed Assets
10000
Net Cash Flows from Investing Activities (B)
(5000)
C. Cash Flow from Financing Activities
Dividend paid
(2000)
Common Stock issued
5000
Notes payable paid
(8000)
Net cash Flows from Financing Activities (C)
(5000)
Net Increase/(decrease) in Cash Flows ( A+B+C)
20500
Add: Cash at the beginning
15000
Cash at the end (matching the balance sheet balance)
35500
Working
Income Statement
Revenues
Cupcake Sales
125000
Gain/Loss on sale of fixed assets
3500
A
Total Revenues
128500
Expenses
Cost of Goods Sold
62500
Wages payable
12500
insurance
1000
Rent
7500
Depreciation
5000
Bad Debt expense
1000
B
Total expenses
89500
C=A-B
Net Income before Taxes
39000
D
Taxes
2000
E=C-D
Net Income after Taxes
37000
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