Question: Assignment 1 Below is the December 31, 2012 balance sheet for XYZ Corporation as well as a narrative of transactions that occurred during 2013. XYZ
Assignment 1
Below is the December 31, 2012 balance sheet for
XYZ
Corporation as well as a
narrative of transactions that occurred during 2013.
XYZ
Corporation
Balance Sheet
December 31, 2012
Assets
Current
Cash
1,000
Accounts
Receivable
3,000
Inventory
4,000
Total Current Assets
8,000
Property and Equipment (net of
accumulated depreciation)
20,000
Total Assets
28,000
Liabilities and Shareholder Equity
Current
Accounts Payable
5,000
Salary Payable
1,000
Total Current Liabilities
6,000
10% Note Payable
10,000
Total Liabilities
16,000
Common Stock
10,000
Retained Earnings
2,000
Liabilities and Shareholder Equity
28,000
Relevant Information for 2013
1.
Sales for the year were $70,000. All sales were on account (i.e., credit sales).
2. Collections of accounts receivable totaled $72,000 cash.
3. New property and equipment were purchased for $4,000 cash.
4. Equipment with a book value of $2,000 was sold for $1,800 in cash.
5. Depreciation was $2,000 for the year.
6. Purchases of inventory totaled $35,000 for the year. All purchases were on
account (on credit).
7. Payments to suppliers for purchases on account totaled $32,000 in cash.
8. The ending inventory balance was $5,000.
9. On December 31
, 2013, repaid the 10% note with accrued interest by
paying the bank $11,000 cash.
10. $20,000 in cash was paid during the year for salaries payable to employees.
(Hint: This amount includes payment of the $1,000 Salarie
s Payable balance from
12/31/2012.)
11. $500 salaries expense was ac
crued for the last 4 days of 201
3.
12. Cash payments for other expenses totaled $1,500.
13. On June 30, 201
3,
XYZ
paid $1,000 in cash for a one
-year insurance policy
covering the peri
od June 30, 2013 to June 30, 2014.
Requirements:
Record all transactions in journal entries. Prepare balance sheet and
income statement (once using the single step method and once using the multiple step
method) for the year ended December 31, 2013. Accounts listed on the balance sheet should be in correct order.
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