Create a Balance sheet for year 2

Year 1 Balance Sheet;

		Balance Sheet
Assets				Amount
Cash			$27,350
Accounts Receivable			$11,083
Closing Inventory			$4,200
Total current assests				$42,633
Equipment			$29,100
Accumulated Depreciation			($2,151)
Land			$175,000
Copyright			$10,000
Total non-current assests				$211,950
Total assets				$254,582
Liabilites:
Income Tax Payable			$409
Accounts Payable			$3,900
Notes Payable			$175,000
Warranty Liability			$139
Interest Payable			$4,375
Total Liabilites				$183,823
Equity:
Common Stock			$60
Additional Paid-in Capital			$69,940
Net Income			$760
Total Equity				$70,760
Total liabilites and equity				$254,582

Year 2 Transactions using FIFO

Transactions and information for the year:

1. Jan 1^st. Spent $3,500 to improve the first piece of equipment purchased in Year 1. Revised useful life is 5 more years while the new salvage value is $2,000.
2. Jan 2^nd, ordered and received 200 units of inventory purchased on account for $13 each
3. Jan 15^th, paid $100 to settle a warranty claim from a customer.
4. Feb 3^rd, ordered and received 150 units of inventory purchased on account for $12 each

1. Feb 22nd, sold 250 units of inventory at $65 each. $10,000 was on account. The inventory came with a 1 year warranty. The company expects that providing the warranty will cost 1% of the sales made.

5. March 1^st, incurred and paid $900 of wages expense
6. Mar 30^th, collected $5000 of accounts receivable
7. April 1^st, paid $50 to settle a warranty claim from a customer.
8. May 2^nd, Paid $4000 of accounts payable.
9. June 1^st, Paid $409 of taxes payable
10. June 30^th, made first interest payment on Note Payable.
11. Aug 12^th, wrote-off a $250 account receivable for a customer who filed for bankruptcy.

2. Oct 12^th, sold 100 units of inventory at $56 each. The inventory came with a 1 year warranty. The company expects that providing the warranty will cost 1% of the sales made.

12. Dec 31^st, spent $1,500 at end of year to repair equipment.
13. Estimated that 2% of Year 2 sales on account would not be collected.
14. Estimated tax rate is 35%