A portion of the Stark Company's balance sheet appears as follows: December 31, 2013 December 31, 2012
Question:
A portion of the Stark Company's balance sheet appears as follows:
December 31, 2013 December 31, 2012
Assets:
Cash. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .$353,300....................$100,000
Notes receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ...........0.......................25,000
Inventory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .........?............................199,875
Liabilities:
Accounts payable. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .........?..............................75,000
Stark Company pays for all operating expenses with cash and purchases all inventory on credit. During 2013, cash totaling $471,700 was paid on accounts payable. Operating expenses for 2013 totaled $220,000. All sales are cash sales. The inventory was restocked by purchasing 1,500 units per month and valued by using periodic FIFO. The unit cost of inventory was $32.60 during January 2013 and increased $0.10 per month during the year. Stark sells only one product. All sales are made for $50 per unit.
The ending inventory for 2012 was valued at $32.50 per unit.
Instructions:
1. Compute the number of units sold during 2013.
2. Compute the December 31, 2013, accounts payable balance.
3. Compute the beginning inventory quantity.
4. Compute the ending inventory quantity and value.
5. Prepare an income statement for 2013 (including a detailed Cost of Goods Sold section and ignoring income taxes).
Ending InventoryThe ending inventory is the amount of inventory that a business is required to present on its balance sheet. It can be calculated using the ending inventory formula Ending Inventory Formula =... Accounts Payable
Accounts payable (AP) are bills to be paid as part of the normal course of business.This is a standard accounting term, one of the most common liabilities, which normally appears in the balance sheet listing of liabilities. Businesses receive... Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...
Step by Step Answer:
1 To determine sales the cash account must be analyzed Beginning balance 100000 Add sales Less Cash paid for operating expenses 220000 Less Cash paid ...View the full answer
