Information regarding LDH, Inc. is as follows:

a. During 2001, LDH purchases with cash, for 10 cents per can, and sells, for 15 cents per can, 490,000 cans of Drinkit, receiving cash for all sales.

b. The prepaid rent on December 31, 2000, gives LDH the contractual right to use a building for the first six months of 2001. On July 1, 2001, LDH prepays an additional eight months rent at $500 per month.

c. The loan is due on December 31, 2003, and interest of 10 percent annually on the balance is due on January 1 of each year, excluding January 1, 2001.

d. LDH’s manager’s salary is $1,000 per month, payable on the first of each month. Since the manager’s first day was January 1, 2001, the manager’s first paycheck is written on February 1, 2001, the second on March 1, the third on April 1, etc.

Construct a December 31, 2001 balance sheet and an income statement for the year ended December 31, 2001, for LDH, Inc.

Prepare Journal entry; Trial Balance sheet ; Income statement and balance sheet
 

Transcribed Image Text:

LDH, Inc. Statement of Financial Position as of December 31, 2000 Assets Liabilities Cash Prepaid rent Total current assets Land Total assets $52,000 $3,000 $55,000 5,000 $60,000 Total current liabilities Note payable Equity: Common stock Total liabilities & equity None 40,000 20,000 $60,000 LDH, Inc. Statement of Financial Position as of December 31, 2000 Assets Liabilities Cash Prepaid rent Total current assets Land Total assets $52,000 $3,000 $55,000 5,000 $60,000 Total current liabilities Note payable Equity: Common stock Total liabilities & equity None 40,000 20,000 $60,000

Answer rating: 100% (QA)

Answer lets prepare the trial balance sheet Account Debit Credit Cash 1020... View the full answer