a. Complete the attached worksheet b. After completing the attached worksheet (part a) create an income statement
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b. After completing the attached worksheet (part a) create an income statement and a balance sheet.
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1. The business opened on January 1st with shareholders purchasing $30,000 in common stock with a $10 par value per share. Cash was paid-in-full by all of the firm's initial shareholders. 2. The board authorized and signed a short-term bank loan note in the amount of $20,000. 3. Furniture and other equipment was purchased. The items purchased had a list-cost of $21,000 but senior management was able to negotiate a 20% discount. Cash was paid for all items. 4. 5. January 1st $4,500 was paid in rent for the month of January. $40,000 merchandise inventory was purchased on January 3rd. $25,000 cash was paid immediately with the remainder due in thirty-days. 6. During the first week of operations $23,000 in sales were achieved. The cost of sales was $16,000. 7. A newspaper advertising campaign was initiated in January. The ads cost $300 and is due and payable by the end of February. 8. In late January addition merchandise inventory was purchase at a cost of $12,500. $4,000 cash was paid with the remainder due in thirty-days. 9. Additional sales of $41,000 were made in late January. $27.700 was on account with the remainder being cash and carry. The cost of sales was determined to be $26,000. 10. January 31st, employee salaries for the month of January were determined to be $5,700. These are due and payable on February 3rd, 11. January 31", senior management confirmed that $18,400 in accounts receivable were collected during the month of January. 12. Accounts payable in the amount of $11.600 was paid during the month of January. 1. The business opened on January 1st with shareholders purchasing $30,000 in common stock with a $10 par value per share. Cash was paid-in-full by all of the firm's initial shareholders. 2. The board authorized and signed a short-term bank loan note in the amount of $20,000. 3. Furniture and other equipment was purchased. The items purchased had a list-cost of $21,000 but senior management was able to negotiate a 20% discount. Cash was paid for all items. 4. 5. January 1st $4,500 was paid in rent for the month of January. $40,000 merchandise inventory was purchased on January 3rd. $25,000 cash was paid immediately with the remainder due in thirty-days. 6. During the first week of operations $23,000 in sales were achieved. The cost of sales was $16,000. 7. A newspaper advertising campaign was initiated in January. The ads cost $300 and is due and payable by the end of February. 8. In late January addition merchandise inventory was purchase at a cost of $12,500. $4,000 cash was paid with the remainder due in thirty-days. 9. Additional sales of $41,000 were made in late January. $27.700 was on account with the remainder being cash and carry. The cost of sales was determined to be $26,000. 10. January 31st, employee salaries for the month of January were determined to be $5,700. These are due and payable on February 3rd, 11. January 31", senior management confirmed that $18,400 in accounts receivable were collected during the month of January. 12. Accounts payable in the amount of $11.600 was paid during the month of January.
Expert Answer:
Answer rating: 100% (QA)
Step 1 Accounting Equation It is the equivalence between the assets liabilities and equity Assets Li... View the full answer
Related Book For
Income Tax Fundamentals 2013
ISBN: 9781285586618
31st Edition
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill
Posted Date:
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