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Posted on Jul 13, 2024

17pts. NEW-Co's ending Month-10 Balance Sheet is Month-11's starting Balance Sheet. (Shown below) During the 11th month's operation, the company has several transactions listed below.

17pts. NEW-Co's ending Month-10 Balance Sheet is Month-11's starting Balance Sheet. (Shown below) During the 11th month's operation, the company has several transactions listed below. Analyze the activities and prepare the 11th period's income statement (below) and ending balance sheet. 1. NEW-Co 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. NEW-Co 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. NEW-Co 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 = $70 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 Ears - Mo. 11 N.Inc - $10,000 Div 13. NEW-Co owes $43,950 income tax on Mo.11 pre-tax profits, pays period 12. NEW pays Mo-10 Tax payable. RECORDING ACTIVITY ON FINANCIAL STATEMENTS - MONTH-11-D EXAM-1 Month110 Income Statemt Revenue Cost of goods GROSS PROFIT Month11D 282.7 155 START 11D 8 STARTING ASSETS CASH ACCT RECEIVABLE INVENTORY Prepaid Curr. Asset TOT CURR. ASSETS LIABIL & EQUITY WAGES PAYABLE SUPPLIER PAYABLE LOC BANK LOAN TAX. Oth PAYABLE 220 443 135 30 .6 881.3 393 Wages Exps Office Exps Depreciation Exps Insurance Exps LT ASSETS Office Eq 64.5 CURR. LIABILITIES LONG TERM DEBT TOTAL LIABILITIES 0 393 Month 110 Income Statemt Revenue Cost of goods GROSS PROFIT STARTING ASSETS CASH ACCT RECEIVABLE INVENTORY Prepaid Curr. Asset TOT CURR. ASSETS Month11D 282.7 155 443 LIABIL & EQUITY WAGES PAYABLE SUPPLIER PAYABLE LOC BANK LOAN TAX. Oth PAYABLE START 11D 8 220 135 30 .6 881.3 393 LT ASSETS Office Eq 64.5 CURR. LIABILITIES LONG TERM DEBT TOTAL LIABILITIES 0 393 Wages Exps Office Exps Depreciation Exps Insurance Exps Building Rent EBIT Interest Exps Pre-tax Income Income Tax NET INCOME TOTAL ASSETS 945.8 OWNERS EQUITY RETAINED EARNS TOTAL EQUITY 200 352.8 552.8 945.8 TOT LIABS & EQUITY Net Inc Dividends = Retained Earns Mo.11 Gross Profit Margin - Gr. Profit/ Rev. Mo. 11 Operating Profit Margin - EBIT/Rev = Mo. 11 Net Prof. Margin = Net Inc./Rev Mo. 11 Return on Beginning Equity Month - 110 Accts Rec. 155 Cash 282.7 Solution Worksheet NET LT TOTAL Assets ASSET 64.5 945.80 Other Curr. 0.6 Inven 443 Wage Payable 8 EXAM1 - Mo11D Accts Loan Payabl Payable 220 135 Tax Oth Liabs 30 Item 1 Owner Equity 200 Month - 110 TOT LIAB+ Tot Equity EQUITY 552.8 945.80 Ret Earns 352.8 Nm 4 5 6 7 8 9 10 11 12 13 Total Accum Deprec., Amort.--> CURRENT ASSETS CURRENT LIABILITIES WORKING CAPITAL > 17pts. NEW-Co's ending Month-10 Balance Sheet is Month-11's starting Balance Sheet. (Shown below) During the 11th month's operation, the company has several transactions listed below. Analyze the activities and prepare the 11th period's income statement (below) and ending balance sheet. 1. NEW-Co 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. NEW-Co 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. NEW-Co 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 = $70 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 Ears - Mo. 11 N.Inc - $10,000 Div 13. NEW-Co owes $43,950 income tax on Mo.11 pre-tax profits, pays period 12. NEW pays Mo-10 Tax payable. RECORDING ACTIVITY ON FINANCIAL STATEMENTS - MONTH-11-D EXAM-1 Month110 Income Statemt Revenue Cost of goods GROSS PROFIT Month11D 282.7 155 START 11D 8 STARTING ASSETS CASH ACCT RECEIVABLE INVENTORY Prepaid Curr. Asset TOT CURR. ASSETS LIABIL & EQUITY WAGES PAYABLE SUPPLIER PAYABLE LOC BANK LOAN TAX. Oth PAYABLE 220 443 135 30 .6 881.3 393 Wages Exps Office Exps Depreciation Exps Insurance Exps LT ASSETS Office Eq 64.5 CURR. LIABILITIES LONG TERM DEBT TOTAL LIABILITIES 0 393 Month 110 Income Statemt Revenue Cost of goods GROSS PROFIT STARTING ASSETS CASH ACCT RECEIVABLE INVENTORY Prepaid Curr. Asset TOT CURR. ASSETS Month11D 282.7 155 443 LIABIL & EQUITY WAGES PAYABLE SUPPLIER PAYABLE LOC BANK LOAN TAX. Oth PAYABLE START 11D 8 220 135 30 .6 881.3 393 LT ASSETS Office Eq 64.5 CURR. LIABILITIES LONG TERM DEBT TOTAL LIABILITIES 0 393 Wages Exps Office Exps Depreciation Exps Insurance Exps Building Rent EBIT Interest Exps Pre-tax Income Income Tax NET INCOME TOTAL ASSETS 945.8 OWNERS EQUITY RETAINED EARNS TOTAL EQUITY 200 352.8 552.8 945.8 TOT LIABS & EQUITY Net Inc Dividends = Retained Earns Mo.11 Gross Profit Margin - Gr. Profit/ Rev. Mo. 11 Operating Profit Margin - EBIT/Rev = Mo. 11 Net Prof. Margin = Net Inc./Rev Mo. 11 Return on Beginning Equity Month - 110 Accts Rec. 155 Cash 282.7 Solution Worksheet NET LT TOTAL Assets ASSET 64.5 945.80 Other Curr. 0.6 Inven 443 Wage Payable 8 EXAM1 - Mo11D Accts Loan Payabl Payable 220 135 Tax Oth Liabs 30 Item 1 Owner Equity 200 Month - 110 TOT LIAB+ Tot Equity EQUITY 552.8 945.80 Ret Earns 352.8 Nm 4 5 6 7 8 9 10 11 12 13 Total Accum Deprec., Amort.--> CURRENT ASSETS CURRENT LIABILITIES WORKING CAPITAL >