Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Acquired $550,000 by signing a note payable with a local bank Sold 25,000 shares of $22 Common Stock for $1,500,000 Purchased Equipment for $300,000 Purchased

Acquired $550,000 by signing a note payable with a local bank Sold 25,000 shares of $22 Common Stock for $1,500,000 Purchased Equipment for $300,000 Purchased Inventory on Account - 25,000 Units at $1.15 per unit Sold 15,000 units at $3.50 on Account Record COGS for Sales on Account Collect $70,000 on Account Paid $117,250 of Accounts Payable Purchased Inventory on Account - 170,000 Units at $1.50 per unit Sold 175,000 units at $3.50 on Account Record COGS for Sales on Account Collect $472,500 on Account Paid $218,600 of Accounts Payable Purchased Inventory on Account - 275,000 Units at $1.35 per unit Sold 200,000 units at $3.50 on Account Record COGS for Sales on Account Collect $735,000 on Account Purchased Inventory on Account - 300,000 Units at $1.15 per unit Paid $494,150 of Accounts Payable Paid Sales & Marketing Expenses of $30,000 Paid Operating Expenses of $75,708 Record Wages Payable of $40,000 Paid Product Line Research & Development Expenses of $150,000 Paid Advertising Expenses of $87,500 Made the yearly required payment on the note payable. The note carries a 7% interest rate and requires payments of $50,000 plus interest each December 31. Record first year of depreciation expense on equipment purchased in Year 2 with salvage value of $38,000 & useful life of 7 Yrs Declared a $10,000 cash dividend for stockholders Paid a $10,000 cash dividend for stockholders

image text in transcribedimage text in transcribedimage text in transcribedimage text in transcribedimage text in transcribedimage text in transcribed

A B C C F G I | J K L M DE Goods Available for Sale Pricell Units Unit Total Cost of Goods Sold Price/ Units Unit Total Ending Inventory Price/ Units Unit Total 2 3 Beg Bal 4 Purchases: 5 6 7 00 9 9 10 11 12 13 Total 14 15 NOTE: You will need to calculate your estimated COGS for the budget template tab 16 using the Weighted Avergae method discussed in LO5-6 17 Flexible Budget Actual Year 2 at 390,000 Units Sold Pro-Forma at 415,000 Units Sold Pro-Forma at 440,000 Units Sold Sales Revenue Cost of Goods Sold Gross Profit Operating Expenses Sales & Marketing Operating Costs Wages Research & Development Expense Advertising Expense Depreciation Exp Interest Expense Net Income Inventory Production *use ending inventory from CORRECTED horizontal balance sheet for beginning inventory Beginning Inventory for Jan 1 Year 3 + Purchases - Estimated COGS = Desired Ending *at 415,000 units at average inventory purchase price per unit from Year 2 (rounded to 2 decimal places) D 1 2 $ $ B Income Statement Year 2 3 4 Sales Revenue 5 Less: Cost of Goods Sold 6 Gross Margin 7 8 Less: Expenses 9 Sales & Marketing Operating Costs Wages 12 Research & Development Expense Advertising Expense Depreciation Expense Interest Expense 16 Total Operating Expenses 17 18 Net Income (Loss) 10 11 13 14 15 $ $ 19 20 21 B C n D 1 2 Balance Sheet Year 2 3 4 5 Assets 6 Cash $ 7 8 9 10 11 12 13 Total Assets $ 14 15 Liabilities 16 Accounts Payable 17 18 19 20 Total Liabilities $ 21 22 Stockholders Equity $ 23 24 25 26 Total Stockholders Equity $ 27 28 29 Total Liabilities and Stockholders Equity $ 30 Statement on Stockholders' Equity Year 2 Beginning Common Stock & APIC Plus: common stock issued Plus: additional paid in capital Ending Common Stock $ Beginning Retained Earnings Plus: Net Income Less: Dividends Ending Retained Earnings $ Total Stockholders' Equity $ Statement of Cash Flows Year 2 Cash flows from operating activities Cash receipts from revenue Cash payments for expenses Net cash flow from operating activities $ Cash flows from investing activities: Cash payments to purchase equipment $ Cash flows from financing activities: Cash receipts from borrowing funds Cash receipts from issuing common stock Cash payments to repay borrowed funds Cash payments for dividends Net cash flow from financing activities $ $ Net increase/(decrease) in cash Plus: beginning cash balance Ending cash balance $

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Contemporary Issues In Social Science

Authors: Simon Grima, Ercan Özen, Hakan Boz

1st Edition

1800439318, 9781800439313

More Books

Students also viewed these Accounting questions

Question

Compare and contrast long-term and short-term orientation cultures

Answered: 1 week ago

Question

Discuss the research behind the notion of a pancultural self

Answered: 1 week ago