1. Tim Lumber buys $350,000 more inventory, pays $150,000 cash now, balance due to suppliers next month. Pays cash in Mo. 11 against Accts Payable starting balance owed from Mo-10 Accts Payable.

2. Tim Lumber sells $475,000 of inventory to customers for $725,000 net. $450,000 were cash sales, balance of sales on credit due from customers in 30 days in next month’s accounting period.

3. $140,000 cash is collected in the current Month-11 period on Accts Receivable carried  over from Mo.10

4. Building monthly rent paid cash in current period is $10,000 monthly going forward

5. Wage expense = $45,000, $30,000 cash, balance paid next period. Mo-10 Wage Payable is paid cash now.

6. $50,000 is repaid on the Bank loan. Mo. loan interest expense = $1,000, paid cash in current period.

7. Tim Lumber buys extra $200,000 inventory, pays $50,000 cash, balance on Supplier credit, due in Mo. 12

8. Office supplies and utilities expense together totaled $30,000, paid cash in the current period

9. Depreciation expense is $750 per month ($72,000 div. by 8 = $9,000 annual div. by 12 = $750 mo.)

10. Amortized monthly insurance policies expense of $300 recorded in the current period

11. Another $75,000 is received in Mo.11 from accts rec. owed by customers who bought on credit in month 11.

12. Dividends = $10,000 paid cash to Owner in Mo.11 Month-11 Retained Earns = Mo. 11 N.Inc - $10,000 Div

13. Tim Lumber owes $43,950 income tax on Mo.11 pre-tax profits, pays period 12. Tim Lumber pays Mo-10 Tax payable

PREPARE THE 11 PERIOD INCOME STATEMENT & ENDING BALANCE SHEET

Transcribed Image Text:

CASH 282.7 WAGES PAYABLE 8 ACCT RECEIVABLE 155 SUPPLIER PAYABLE 220 INVENTORY 443 LOC BANK LOAN 135 Prepaid Curr. Asset .6 TAX. Oth PAYABLE 30 TOT CURR. ASSETS 881.3 CURR. LIABILITIES 393 LT ASSETS Office Eq 64.5 LONG TERM DEBT TOTAL LIABILITIES 393 TOTAL ASSETS 945.8 OWNERS EQUITY 200 RETAINED EARNS 352.8 TOTAL EQUITY 552.8 TOT LIABS & 945.8 EQUITY CASH 282.7 WAGES PAYABLE 8 ACCT RECEIVABLE 155 SUPPLIER PAYABLE 220 INVENTORY 443 LOC BANK LOAN 135 Prepaid Curr. Asset .6 TAX. Oth PAYABLE 30 TOT CURR. ASSETS 881.3 CURR. LIABILITIES 393 LT ASSETS Office Eq 64.5 LONG TERM DEBT TOTAL LIABILITIES 393 TOTAL ASSETS 945.8 OWNERS EQUITY 200 RETAINED EARNS 352.8 TOTAL EQUITY 552.8 TOT LIABS & 945.8 EQUITY

Answer rating: 100% (QA)

Inventory Particulars amount Particulars amount Beg balace 443 COGS 475 Cash 150 Balance 518 Accounts payable 200 cash 50 Accounts payable 150 993 993 ... View the full answer