McGuire Corporation began operations in 2018. The company purchases computer equipment from manufacturers and then sells it
Question:
McGuire Corporation began operations in 2018. The company purchases computer equipment from manufacturers and then sells it to retail stores. During 2018, the bookkeeper used a check register to record all cash receipts and disbursements. No other magazines were used.
The following is a summary of the cash inflows and outflows made during the year.
Cash Receipts: | |||
Sale of Common Stock | ps | 67,500 | |
customer collections | 320.000 | ||
Borrowed from local bank on April 1, signed note requiring | |||
principal and interest at 12% to be paid on March 31, 2019 | 34,000 | ||
Total cash inflows | ps | 421,500 | |
Cash disbursements: | |||
purchase of goods | ps | 195.000 | |
Payment of wages and salaries | 76,000 | ||
Purchase of office equipment | 40.500 | ||
Payment of rent in the building. | 10,500 | ||
Miscellaneous expenses | 12,200 | ||
Total cash disbursements | ps | 334,200 | |
You are called upon to prepare financial statements as of December 31, 2018. You were provided with the following additional information:
Customers owed the company $19,000 at the end of the year.
At the end of the year, $29,400 was still owed to suppliers of merchandise purchased on credit.
At the end of the year, merchandise inventory costing $46,400 was still available.
Wages and salaries owed to employees at year-end were $5,100.
On December 1, $3,150 in rent was paid to the owner of the building used by McGuire. This represented rent for the months of December through February.
The office equipment, which has a useful life of 10 years and has no salvage value, was purchased on January 1, 2018. Straight-line depreciation is used.
Required:
Prepare an income statement for the year 2018 and a balance sheet as of December 31, 2018.
Intermediate Accounting
ISBN: 9781259722660
9th Edition
Authors: J. David Spiceland, James Sepe, Mark Nelson, Wayne Thomas