5-5 Chris's Beamer Biz, Inc. Year 3 - 20X3 (See website for beginning balances) During the third year she paid the money she owed for last year's merchandise and received the money due her from last year's sales. Also, during the third year she bought 15 Beamers and sold 12. The Beamers cost her $45,000 each and she sold them for $66,000 apiece. Terms for purchasing and selling the Beamers remain the same. She paid rent of $17,000, which represented the current year's rent plus the rent she owed at the end of the prior year plus January of next year's rent. She paid cash wages of $30,000 and utilities of $3,000. She issued 100 new shares of common stock on September 1st for $10,000 in exchange for a billboard sign which she expects to last 10 years and then be worth $1,000. On October 1st she took out a one-year insurance policy for $3,600. She expenses the insurance at $300 per month. She paid her annual interest to Uncle Phil. She paid the taxes she owed at the end of last year. At the end of the year she owed wages of $3,000 and taxes for the year (tax rate remains 30%). At December 31, she paid a dividend of $12,000. You use the FIFO inventory system. So how did she do the third year? (Prepare Journal Entries, T-Accounts, and Financial Statements) CBB, Inc. Balance Sheet December 31, 20x2 Assets Liabilities Cash Inventory Current Assets Accounts Receivable Total Current Assets Current Liabilities $ 726,600 192,000 Accounts Payable Taxes Payable $ 216,000 33,300 80,000 998,600 Wages Payable Rent Payable 3,000 4,000 Total Current Liabilities 256,300 Long-Term Debt Fixed Assets Land Note Payable-Phil 150,000 50,000 Total Long-Term Debt 150,000 Net Fixed Assets 50,000 Total Liabilities 406,300 Other Assets Owners' Equity Security Deposit 1,000 Common Stock 475,000 Retained Earnings 168,300 Total Owners' Equity 643,300 Total Assets $ 1,049,600 Total Liabilities and Owners' Equity $1,049,600 Beginning Balance Common Stock Issued Net Income Dividends Declared Ending Balance Sales Cost of Sales Gross Margin CBB, Inc. Income Statement For the Year Ended December 31, 20x2 Operating Expenses Wage Expense Rent Expense Utilities Expense Total Operating Expenses Operating Income Other Revenues & Interest Expense Income Before Taxes Tax Expense Net Income Earnings Per Share (5,500 4/12)+(5,700*8/12) $ 480,000 320,000 160,000 $ 26,000 12,000 3,000 41,000 119,000 8,000 > 111,000 33,300 $ 77,700 $ 13.79 CBB, Inc. Statement of Owners' Equity For the Year Ended December 31, 20X2 Common Shares Stock 4500 $ 450,000 200 25,000 Retained Earnings $ 95,600 77,700 5,000 > 4700 $ 475,000 $ 168,300 Total $ 545,600 $ 25,000 77,700 5,000 $ 643,300