& Financial statements You are now asked to prepare the following financial statements: I Income statement. This statement is prepared to help assess the nancial performance of the business. It summarizes the revenues earned and expenses incurred over the month of June. I Statement of stockholders' equity. This statement shows the movements in equity over the month of June. I Balance sheet. This statement reports the nancial position of the business at the end of June. It presents the assets, liabilities and equity of the business as at June 30, 2020. Instructions for nancial statements Using the company's accounting policies found in the policies and procedures'3F popup, and appropriate information from previous pages of the practice set: 1)Prepare an income statement for the month of June. To begin, select the appropriate accounts using a popup link. Note that when you select an account, brackets may automatically appear around the input box in which you are asked to enter the balance of the account. Next, enter all values as positive amounts because amounts to be subtracted are indicated on the income statement with brackets around the input box. To complete the income statement, you are required to select items from drop-down lists. Brackets will be displayed if you select loss. After taking a physical count of inventory, the balance of inventory on hand as at June 30 is $63,659. You will need to use this infom'lation to calculate cost of goods sold under the periodic inventory system. You may not need to use all of the lines in the income statement. 2)Prepare a statement of stockholders' equity for the month of June. Most values are to be entered in the input boxes as positive amounts, because amounts to be subtracted are already indicated on the statement with brackets around the input box. Note that you are required to select incomefloss from a drop-down list. Brackets will be displayed if you select loss. 3)Prepare a balance sheet as at the end of June. To begin, select the appropriate accounts using a popup link. Note that when you select an account, brackets may automatically appear around the input box in which you are asked to enter the balance of the account. Next, enter all values as positive amounts because amounts to be subtracted will be indicated on the balance sheet with brackets around the input box. Remember that the balance of inventory on hand as at June 30 is $63,659. You will need to use this information to complete the balance sheet. You may not need to use all of the lines in the balance sheet. Back-On-Track functionality Please note that any answers from previous pages carried through onto this page (either on the page or in a popup information page) have been reset, if necessary, to the correct answers. Your particular answers from previous pages are no longer shown. Cover 2 Cover Income Statement For the month ended June 30, 2020 INCOME $ Revenue Sales Revenue select) Sales Returns and Allows (select) Sales Discounts (select) select) In Net sales revenue COST OF GOODS SOLD GROSS PROFIT OPERATING EXPENSES Selllng expenses . dvertising Expense - ' 4000!) agesEXPense % 12509b Total selling expenses General and admlnlstratlve expenses I Tee) 208:) soc) new) 5300;) g) 398') 7) Es _v Total general and admlnlstratlve expenses TOTAL OPERATING EXPENSES | 61374' (I 52045 6 333b (; 165099 (I 142629 [ 55j TOTAL OPERATING EXPENSES INCOME FROM OPERATIONS Other revenues Interest Revenue select) (select) Other expenses Interest Expense (select) 215) select) NET INCOME (Q=9 cover 2 over Cover 2 Cover Statement of Stockholders' Equity For the month ended June 30, 2020 COMMON STOCK Opening balance, May 31, 2020 85000 Issue of common stock 0 Closing balance, June 30, 2020 85000 RETAINED EARNINGS Opening balance, May 31, 2020 99878 Net | income + ) for the period 4386 Dividend paid 0 ) Closing balance, June 30, 2020 104264cover Cover 2 Cover Balance Sheet June 30, 2020 ASSETS $ $ Current Assets Cash SE 89586 Short-term Investments SE 20000 ARC - Accounts Receivable 12807 Interest Receivable SE 100 Merchandise Inventory SE 63659 Office Supplies SE 3656 Prepaid Rent SE 3000 Prepaid Advertising SE 8000 Prepaid Insurance SE 2400 Total Current Assets 203208 Property, Plant and Equipment Office Furniture (SE 8000 Accum Depn: Office Furnit 1750 ) Office Equipment SE 48000 Accum Depn: Office Equip (S( 20305) SE SE SE SE SE Total Property, Plant and 33945 Equipment TOTAL ASSETS 237153LIABILITIES Current Liabilities APC - Accounts Payable O(SE 2030 Wages Payable SE 1440 Electricity Payable (SE 996 Water Payable (SE 208 Interest Payable (SE 215 SE SE SE SE Total Current Liabilities 4889 Long-term Liabilities Bank Loan Payable (select) 43000 (select) (select) (select) (select) select) select) select) select) TOTAL LIABILITIES 47889 STOCKHOLDERS' EQUITY Common Stock (select) 85000 select) select) Retained Earnings TOTAL EQUITY TOTAL LIABILITIES AND STOCKHOLDERS' EQUITYCover 2 Cover Worksheet For the month ended June 30, 2020 Unadjusted Trial Adjustments Adjusted Trial Income Balance Sheet Acct. No. Account Name Balance Balance Statement Debit Credit Debit Credit Debit Credit Debit Credit Debit Credit 100 Cash 89,586 89,586 89,586 102 Short-term Investments 20,000 20,000 20,000 |ARC - Accounts Receivable Control 12,807 12,807 12,807 112 Interest Receivable 100 100 100 120 Merchandise Inventory 75,784 75,784 75,784 63,659 63,659 130 Office Supplies 7,312 3,656 3,656 3,656 140 Prepaid Rent 6,000 3,000 3,000 3,000 141 Prepaid Advertising 12,000 4,000 8,000 8,000 142 Prepaid Insurance 3,000 600 2.400 2.400 150 Office Furniture 8,000 8,000 8,000 151 Accum Depn: Office Furniture 1.653 97 1.750 1,750 0 Office Equipment 48,000 48,000 48,000 161 Accum Depn: Office Equipment 19,907 398 20,305 20.305 210 APC - Accounts Payable Control 2,030 2,030 2,030 220 Wages Payable 1,440 1,440 1,440 221 Electricity Payable 996 996 996 222 Water Payable 208 208 208 225 Interest Payable 215 215 215 250 Bank Loan Payable 43,000 43,000 43,000 300 Common Stock 85,000 85,000 85,000 301 | Retained Earnings 99,878 99,878 99,878 400 Sales Revenue 61,374 61,374 61,374 401 Sales Returns and Allowances 5,204 5,204 5,204 402 Sales Discounts 333 333 333 403 Interest Revenue 231 100 331 500| Purchases 10,180 10,180 10, 180 501 | Purchase Returns and Allowances 1,434 1.434 2 Purchase Discounts 75 75 75 511 Advertising Expense 4,000 4.000 4,000 516 Wages Expense 11,069 1,440 12,509 12,509 540 Rent Expense 3,000 3,000 3,000 541 Electricity Expense 996 996 996 542 Water Expense 208 208 208 543 Insurance Expense 600 600 600 4 Office Supplies Expense 3,656 3,656 545 Salary Expense 5.30 5,300 5,300 560 Depn Expense: Office Furniture 97 97 97 561 Depn Expense: Office Equipment 398 398 398 1 Interest Expense 215 215 215 572 Admin. Expense - Bank Charges Totals 314,582 314,582 14,710 14,710 318,036 318,036 122,487 126,873 259,208 254,822 Net income or loss 4,386 4,386 Totals 126,873 126,873 259,208 259,208