Question

An accountant employed by Zimmerman Electronics Inc. was reviewing the following balances shown in the company’s ledgers for 2012:
Mortgage ................ $80,000
Prepaid insurance ............ 2,000
Marketable securities ............ 5,000
Sales returns .............. 50,000
Cash and cash equivalents .......... 5,000
Advertising ............... 50,000
Trade receivables ............ 15,000
Gross revenue .............. 650,000
Trade and other payables ......... 12,000
Buildings (net) ............. 100,000
Cost of sales .............. 300,000
Short-term notes payable ......... 10,000
Retained earnings
(December 31, 2011) ........... 40,000
Finance costs .............. 10,000
Land .................. 25,000
Office salaries ............... 70,000
Share capital ............... 15,000
Lease .................. 20,000
Insurance .................. 10,000
Depreciation (Administration) ......... 20,000
Income tax expense ............ 10,000
Dividends paid .............. 10,000
Interest income ............. 15,000
Inventories ................ 20,000
Sales salaries ............... 100,000

1. Prepare the following financial statements:
a. Statement of income
b. Retained earnings (section of the statement of changes in equity)
c. Statement of financial position
2. Calculate the company’s cash flow for the year.



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  • CreatedDecember 03, 2014
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