Question
For Davis Uniform Corporation as of Mar 31, 2021, prepare the financial statements including Income Statement (multiple-step with EPS section), Classified Balance Sheet, and Statement
For Davis Uniform Corporation as of Mar 31, 2021, prepare the financial statements including Income Statement (multiple-step with EPS section), Classified Balance Sheet, and Statement of Stockholders Equity. Statement of Cash Flows is not required.
Davis Uniform Corporation operates a store that sells uniforms. The following are the transactions that occurred during the first quarter of operation- Jan. 1 to Mar. 31, 2021.
Jan. 1 Davis issues 20,000 shares of $1 par value common stock with an issuing price of $7.5
per share.
Jan. 2 Purchased furniture and fixtures from Acme Furniture for $10,800 cash.
Jan. 4 Purchased $1,200 of office supplies for cash.
Jan. 15 Paid $27,000 in advance for one years rent on the store building. The rent begins with
Jan 15. The company counts January for half a month.
Jan. 31 Paid salaries to employees for the first month, $2,700.
Feb. 1 Purchased $46,800 of uniforms inventory on account from the Birdwell Uniforms
Manufacturing Company.
Feb. 1 Borrowed $50,000 from a local bank and signed two notes. The first note of
$20,000 requires payment of principal in six months with an annual interest rate of 4%.
The second note of $30,000 requires the payment of principal and all the interest in two years with an annual interest rate of 5%.
Feb. 6 Sold uniforms on account to Discovery School for $5,400. Cost of the uniforms sold
is $3,600.
Feb. 9 Paid Birdwell Uniforms Manufacturing Company $37,500 for the purchase on Feb. 1.
Feb. 20 Sold uniforms to a chemical factory for $59,400 cash. The cost of the uniforms sold is
$35,640.
Feb. 23 Purchased $7,500 of uniforms inventory on account from the Birdwell Uniforms
Manufacturing Company.
Feb. 28 Paid salaries to employees for the month of February, $3,150.
Mar. 1 Sold uniforms to the football team of Robert Lee High School and accepted a $9,000,
three-month, note receivable with an annual interest rate of 5%. The cost of the uniforms sold is $7,200.
Mar. 1 Subleased a portion of the building to a jewellery store. Received $2,400 in advance for three months rent beginning on Mar. 1.
Mar. 3 Some uniforms were returned by the chemical factory which made a purchase on
Feb. 20. The selling price and cost of the returned uniforms is $5,400 and 3,240,
respectively. Cash of $5,400 is refunded to the customer.
Mar. 23 Paid Birdwell Uniforms Manufacturing Company $10,800 for the purchases in Feb.
Mar. 25 Received $4,500 cash from Discovery School.
Mar. 30 The corporation announced and paid its shareholders cash dividends of $2,000.
Additional information:
- At the end of March, $675 of supplies remained.
- The furniture and fixtures have a useful life of six years and will be worthless at the end of their useful life.
- Salaries for the month of March are $3,500 and will be paid in April.
- The companys management estimated that of the $900 remaining on account from Discovery School, $150 would be uncollectible.
- Income tax rate applied to the company is 21%.
For Davis Uniform Corporation as of Mar 31, 2021, prepare the financial statements including Income Statement (multiple-step with EPS section), Classified Balance Sheet, and Statement of Stockholders Equity. Statement of Cash Flows is not required.
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