Dawson OConnor is the owner of Miller Island Sales, a distributor of fishing supplies. The following is the balance sheet
Dawson keeps very few records and has asked you to help him prepare the 2016 financial statements for Miller Island Sales. An analysis of the 2016 cash transactions recorded in the company€™s checkbook indicates deposits and checks as follows:
Total deposits: $173,200; all were collections from customers except for a long-term $10,000 bank loan.
Checks written: $169,800 summarized as follows:
Inventory ................. $123,100
Salaries ................. 4,250
Rent ................... 4,800
Equipment ............... 4,000
Note payments (including interest of $650) .. 2,650
Office expense ............. 3,400
Auto expense ............... 4,100
Withdrawals .............. 23,500
Other information about the company is as follows:
1. Accounts receivable at December 31, 2016: $ 9,200.
2. Accounts payable at December 31:
3. Salaries payable at December 31, 2016, $1,800.
4. Equipment is depreciated by the straight-line method over a 10-year life. The equipment purchased in 2016 was acquired on July 1. All of the equipment will have zero salvage value at the end of its useful life.
5. Interest payable at December 31, 2016: $140.
6. The company uses a periodic inventory system. Inventory at December 31, 2016: $17,400.
1. Prepare a worksheet to summarize the transactions and adjustments of Miller Island Sales for 2016.
2. Prepare a 2016 income statement and a balance sheet as of December 31, 2016.
Financial statements are the standardized formats to present the financial information related to a business or an organization for its users. Financial statements contain the historical information as well as current period’s financial... Salvage Value
Salvage value is the estimated book value of an asset after depreciation is complete, based on what a company expects to receive in exchange for the asset at the end of its useful life. As such, an asset’s estimated salvage value is an important... Accounts Receivable
Accounts receivables are debts owed to your company, usually from sales on credit. Accounts receivable is business asset, the sum of the money owed to you by customers who haven’t paid.The standard procedure in business-to-business sales is that... Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...
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