Company Alpha Inc.

Year $2022$

Please prepare the income statement and the balance sheet based on the transactions.

Additional Information:

$.$ Taxes do not have to be taken into account.

$.$ If necessary, use linear depreciation.

Transaction:

$1.$ You raise equity in the form of a cash deposit by the amount of $200,000$

$2.$ You record a note payable for $45,000$

$3.$ You record salary expense for $55,000,$ however only $35,000$ is paid in cash.

$4.$ You buy inventory for $150,000.$ Half is paid in cash: the other half is on credit

$5.5.$ Your record cost of Goods Sold for $120,000$

$6.$ You record sale revenue on account for $250,000.$ An allowance of $5\%$ is required, At the end of the fiscal year, some of the receivable must be written by $15,000.$ You adjust the ending balance of the allowance to the $5\%$ of the residual balance of the accounts rec.

$7.$ At the beginning of the fiscal year you buy a machinery for $105\mathrm{.}000$ in cash. The useful life of the asset is $5$ years. At the end of fiscal year, the company performs an impairment test on the asset. The fair value less price to sell of the asset is estimated to be $70\mathrm{.}000.$ However, the asset is also estimated to generate a constant stream of cash over the next four years of $18\mathrm{.}250,$ with an interest rate of $5\%.$ No future residual value. Perform the impairment test and account for any potential impairment loss.

$8.$ You pay insurance expense by the amount of $12000$ for the last six month of this year and for the first half of next year advance.

$9.$ You pay a cash dividend by the amount of $10,500$

$10.$ You collect for service paid in advance but not yet performed for $30,000$

Question $9$: What is the impairment loss in the income statement?

Answer:

Question $10$: What is the net income?

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Question $11$: What is the Bad receivable expense?

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Question $12$: What is the depreciation expense

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Question $13$: What is the ending cash balance?

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Question $14$: What is the ending balance of the accounts receivable, Net?

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Question $15$: What is the ending balance of PPE

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Question $16$: What is the ending balance of Retained Earnings?

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Question $17$: What is the value of Total liability?

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