40pts Worksheet for Balance Sheet provided. NEW-Co's ending Month-10 Balance Sheet is Month-11's starting Balance Sheet. (Shown below) During the 11th month, the company has several transactions listed below. Analyze the activities and prepare the 11th period's income statement (below) and ending balance sheet. 1. $50,000 is repaid on the Bank loan. Mo, loan interest expense = $1,000. paid cash in current period. 2. NEW-Co buys extra $260,000 inventory, pays $60,000 cash, balance on Supplier credit, due in Mo. 12 3 $130,000 cash is collected in the current Month-11 period on Accts Receivable carried over from Mo. 10 4. NEW-Co buys $400,000 more inventory, pays $150,000 cash now, balance due to suppliers next month. Pays cash in Mo 11 against all of starting balance owed in Accts Payable from Mo-10 Accts Payable. 5. NEW-Co sells $525,000 of inventory to customers for $825,000 net. $450.000 were cash sales, balance of sales on credit due from customers in 30 days in next month's accounting period. 6. Building monthly rent paid cash in current period is $15,000 monthly going forward 7. Wage expense = $60,000, S40,000 in cash, balance paid next period. Mo-10 Wage Payable is paid cash now. 8. Office supplies and utilities expense together totaled $30,000, pald 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 $90,000 is received in Mo. 11 from accts rec. owed by customers who bought on credit in month 11. 12. Dividends = $18,000 paid cash to Owner in Mo. 11 Month-11 Retained Earns - Mo. 11 N.Inc - $18,000 Div 13. NEW-Co owes $48,950 income tax on Mo. 11 pre-tax profits, pays period 12. NEW pays Mo-10 Tax payable. EXAM-1 RECORDING ACTIVITY ON FINANCIAL STATEMENTS - MONTH-11-D Month11D START 11D 8 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 220 135 30 .6 881.3 64.5 LT ASSETS Office Eq CURR. LIABILITIES LONG TERM DEBT TOTAL LIABILITIES 393 0 393 TOTAL ASSETS 945.8 Wages Exps Office Exps Depreciation Exps Insurance Exps Building Rent EBIT Interest Exps Pre-tax Income Income Tax NET INCOME OWNERS EQUITY RETAINED EARNS TOTAL EQUITY 200 352.8 552.8 945.8 TOT LABS & 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 Solution Worksheet Other NET LT TOTAL Curr. Assets ASSET 0.6 64.5 945.80 Wage Payable 8 EXAM1 - Mo11D Accts Loan Payo Payable 220 135 Tax Oth Labs 30 Owner Equity 200 Ret Earns 352.8 Month - 110 TOT UAB Tot Equity EQUITY 552.8 945.80 Month - 110 Sep.19 Accts Cash Rec inven Item 282.7 155 443 1 2 3 4 5 6 7 8 9 10 11 12 13 Total Accum Deprec., Amort..> Current Assets Current Liabilities WORKING CAPITAL >
