2.ACCOUNTING problem.

INSTRUCTIONS.

- With the following data, elaborate with a written procedure (not Excel):

*Income Statement

A company in Mexico has the following balances at the end of the year:

Customer Advance $50,000

Installation expenses $40,000

Cash $45,000

Notes payable $50,000

Sales $2,000,000

Clients $300,000

Office rent $ 55,000

Interest collected in advance $15,000

Security deposits $20,000

Beginning inventory $2,000,000

Banks $350,000

Suppliers $30,000

Agent and salesmen salary $100,000

Purchases $550,000

Insurance Premiums $55,000

Advance to suppliers $ 35,000

Sales returns $85,000

Ending inventory $850,000

Various creditors $15,000

Furniture and equipment $90,000

Purchase expenses $10,000

Rents paid in advance $40,000

Bank investment interest $40,000

Rents obtained in advance $ 15,500

Discounts on sales $20,000

Discounts on purchases $20,000

Sundry debtors $50,000

Capital Stock $470,315

Note:

Income Taxes: 10%

Employee Profit Sharing (PTU): 20%