The Garment Tree Ltd. sells clothing. At the end of 2016, it had the following account balances:
Question:
The Garment Tree Ltd. sells clothing. At the end of 2016, it had the following account balances:
Accounts receivable..................$ 9,000
Rent expense................... 12,000
Inventory ...................... 18,000
Retained earnings ................. 11,000
Advertising expense ................... 5,000
Cash ........................ 6,000
Wage expense.................. 32,000
Dividends declared ................. 1,000
Miscellaneous expense ................. 3,000
Wages payable .................. 2,000
Common shares ............... 15,000
Prepaid rent .................... 1,000
Cost of goods sold ................. 57,000
Accounts payable ................ 6,000
Sales ..................... 110,000
Required:
a. Prepare a statement of income for the year ended December 31, 2016.
b. In answering part “a,” you did not need to use all the accounts provided. For each item that you did not use, explain why you did not include it on the statement of income.
Step by Step Answer:
a b We did not use the following items on the statement of income 1 Wages payable This liability item reflects the wages owed by The Garment Tree Ltd to its employees for hours worked but not yet paid ...View the full answer
Understanding Financial Accounting
ISBN: 978-1118849385
1st Canadian Edition
Authors: Christopher Burnley, Robert Hoskin, Maureen Fizzell, Donald
