beginning balances
#4 Homework Read Pages 79-81 Problem 4-11 Fluff Business, 2020 Year 2, (See page 76 for beginning balances) During the second year, you bought 15 Fluffs and sold 12, same prices as year 1, but you have arranged terms that allow you to pay 40% of the purchase price in cash and the rest in one year. You now sell Fluffs for 50% down and the rest will be paid for by the customer next year. You paid rent of $12,000. You hired a worker whom you paid $11,000 (a Miami graduate). Tax rate is the same (30% of taxable income). Paid 2019 taxes. You will pay 2020 taxes next year. You paid the interest to Mike on December 31. You paid office expenses of $12,000 and a dividend of $1,000. You also paid $4,000 for advertising in The Post. On February 1st you issued 50 shares of common stock for $12,000. You owe your employee $1.000 more in wages at the end of the year. So how did you do? Prepare Journal Entries, T-Accounts, Income Statement, Statement of Owners' Equity and Balance Sheet. Problem 4-218 Bobcat Betty's Fudge Sandwich Business Year 2019. It was January 1, 2019 and Bobcat Betty had $24,000 and decided she wanted to become rich. She decided to operate as a corporation so she filed the necessary papers with the State, put the money in the bank under the company name and issued 240 shares of common stock to herself. On January 1 she paid $1,500 to rent a cart for one year. During the year she bought 24,000 fudge sandwiches for $1.00 each. She paid $20,000 cash for the sandwiches and owed $4,000 at the end of the year. She sold 20,000 sandwiches at $2.00 each. In addition she paid salaries of $8,500 and parking fees of $1,300. At the end of the year, in addition to what she owed for sandwiches, she owed $500 in parking fees. To secure her parking spot, Bobcat Betty had put down a $500 security deposit at the beginning of the year. Bobcat Betty's kept some of her cash in an interest- bearing account and the bank paid her $200 in interest income during the year. Bobcat Betty issued an additional 60 shares of common stock on March 14 for $6,000. The tax rate is 40% and taxes are to be paid on March 15th of the following year. Record all transactions, post to T accounts and prepare financial statements. 1 600 $ Assets Current Assets Cash $22.400 Inventory 9.000 Total Current Assets 31,400 10.000 10.600 Fixed Assets Land Fluff, Inc. Balance Sheet December 31, 2019 Liabilities Current Liabilities Taxes Payable Long-Term Liabilities Note Payable- Mike Total Liabilities Owners' Equity Common Stock Retained Earnings Total Owners' Equity Total Liabilities & Owners' Equity $73.400 Fluff, Inc. Income Statement For the Year Ended December 31, 2019 40,000 60.000 2.800 62.800 Other Assets Security Deposit Total Assets 2.000 $73,400 $ 35,000 15.000 20,000 Sales Cost of Goods Sold Gross Margin Operating Expenses Rent Expense Advertising Expense Total Operating Expenses Operating Income Other Revenues &
