Riley Incorporated reports the following amounts at the end of the year (all amo

Question

Riley Incorporated reports the following amounts at the end of the year (all amounts in $000): Cash $16,140 Product Revenues $112,500 Depreciation Expense 3,210 Mortgage Payable 38,000 Taxes Payable 1,020 Treasury Stock 650 Buildings 79,000 Salaries 62,800 Land 40,000 Accumulated Depreciation 21,730 Current Portion - Notes and Mortgage Payable 2,200 Accounts Payable 18,500 Equipment 42,000 Net Accounts Receivable 23,500 Income Tax Expense 3,650 Discounts on Notes Payable 7,950 Interest Expense 4,000 Inventory 6,400 Notes Payable 25,650 Costs of Goods Sold 17,400 Utilities 350 License Revenues 250 Advertising Expense 11,300 Short Term Investments (Securities) 2,500 Prepaid Expense 900 Wages Payable 3,200 In addition, the company had common stock of $75,000 at the beginning of the year and issued an additional $5,000 during the year. The company also had retained earnings of $20,700 at the beginning of the year and declared/paid dividends of $2,000 during the year. Prepare the income statement, statement of stockholders’ equity, and balance sheet.

Explanation / Answer

Answer

Income Statement

Revenues

Product revenues

112500

Licence Revenues

250

Total Revenues (A)

112750

Expenses

Salaries

62800

Discount on Notes Payable

7950

Interest expense

4000

Depreciation expenses

3210

Income Tax Expenses

3650

Cost of Goods Sold

17400

Utilities

350

Advertising Expenses

11300

Total Expenses (B)

110660

Net Income (A-B)

2090

Statement of Stockholder's Equity

Common Stock

Retained Earning

Opening Balance

75000

20700

Add: Issue

5000

Add: Net Income

2090

Less: Dividend

(2000)

Closing Balance

80000

20790

Balance Sheet

A. Stockholder's Equity

Common Stock

80000

Retained Earning

20790

Treasury Stock

(650)

100140

B. Liabilities

Mortgage Payable

38000

Taxes Payable

1020

Notes & Mortgage payable

2200

Accounts payable

18500

Notes Payable

25650

Wages Payable

3200

88570

Total Stockholders' Equity and Liabilities

188710

C. Assets

Equipment

42000

Building

79000

Land

40000

Accumulated Depreciation

(21730)

139270

Net Accounts Receivables

23500

Cash

16140

Inventory

6400

Short Term Investments

2500

Prepaid Expense

900

49440

Total Assets

188710

Income Statement

Revenues

Product revenues

112500

Licence Revenues

250

Total Revenues (A)

112750

Expenses

Salaries

62800

Discount on Notes Payable

7950

Interest expense

4000

Depreciation expenses

3210

Income Tax Expenses

3650

Cost of Goods Sold

17400

Utilities

350

Advertising Expenses

11300

Total Expenses (B)

110660

Net Income (A-B)

2090

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