GeneralProducts Inc is incorporated in Nevada, USA on Jan 1,2013 to takeover a local retail chain.

The objective of the company is to suuply goods of every day use to customers at the most competitive prices.

GeneralProducts has chain of stores throughout USA.

The retial operations of the company are so designed that customers can shop seamlessly in stores and online.

Balance Sheet of GeneralProducts Inc. on Dec 31, 2015

Assets $

Current Assets Cash and cash equivalent 11,980

Accounts Receivables 20,520

Inventory 317,060 I

nventory of Premiums ( @$1.10 per premium) 660

Total Current Assets 350,220

Long Term Assets I

nvestments 66,775

Property Plant and Equipment 750,000

Less Accumulated Depreciation 90,000

660,000

Total Long Term Assets 726,775

Intangible Assets

Trade Marks 190,000

Total Assets 1,266,995

Liabilities and Shareholders' Equity

Current Liabilities

Accounts Payable 50,722

Liability for Premiums and Coupons 550

5% Short Term Notes Payable 8,000

Accrued Interest on 6% Bonds Payable 3,000

Total Current Liabilities 62,272

6% Bonds Payable due 2020 100,000

Unamortized Discount on Bonds Payable 6,732

93,268

Total Liabilities 155,540

Stockholder's Equity

Common Stock 125,000 shares, par value $1 authorized 100,000 shares issued and outstanding 130,000

Paid inCapital in Excess of Par 946,000

Retained Earnings 35,455

Total nStockholders' Equity 1,111,455

Total Liabilities and Stockholders' Equity 1,266,995

GeneralProducts provides us financial and business related data for 2016 below.

1. Trades Marks were acquired for $200,000 in 2015.

Estimated useful at the time of acquisition was 20 years

There was a litigation brought out by a competitor against the Trade Mark.

General Products could successfully defend this litigation at a cost of $ 45,000.

New useful life of Trade Mark is estimated to be 25 years from the date of acquisition.

2. All sales are on credit and total $ 940,560. COGS are $780,650.

3. Included in the total sales of $940,560 are the sales of General Products 6000 soap powder boxes.

General Products includes one coupon in every soap powder box. Customers can redeem 4 coupons for one Kitchen utensil.

Based on past experience 60% of the coupons are redeemed by customers.

During 2016 3,400 coupons were redeemed.

Purchase of premiums during 2016 total 1,000 premiums @ $1.10 each on credit.

4. 6% Bonds Payable are issued on Jan 1 2015 to yield 8% interest. Interest is paid semi-annually on Jan 1st and June 30th.

General Products can redeem these Bonds any time after June 30, 2014 @ 101.

5. To take advantage of lower interest rates and to finance the redemption of 6% Bonds on Sept.1st 2016,

General Products issued 5%Bonds in the face value of $100,000 to yield 6% The maturity period of these 5% Bonds is 10 years and interest is paid semi-annually on 1st Jan and 30th June.

The proceeds from the issue of 5% Bonds are used to redeem 6% Bonds Payable @ 101 on Sept.1st 2016.

6. Selling Administrative Expenses excluding depreciation are $87,345.

PP&E is depreciated on Straight Line Method over 25 years of life.

7. Cash collected from customers total $906,450

8. Cash paid to suppliers for credit purchases total $728,254

9. Purchases of inventory total $689,525.All purchases are on credit.

10. ABC purchased Land for $30,000 for construction of building

Record the necessary journal entries for 2016

Prepare Income Statement and Retained Earnings Statement for the year 2016

Prepare Balance Sheet on December 31,2016

Show full work of all the financial items reported in Income Statement and Balance Sheet. Please round your calculations closest to $. Ignore tax.

Correct answers according to intructor

Total assets =$1,238,692

Net Income = $18,200

Sr No	Particulars	Debit ($)	Credit ($)
1	Trade marks	$ 45,000
	To cash & cash equivalents		$ 45,000
2	Amortization on intangibles	$ 9,600
	To trade marks		$ 9,600
3	Customer	$ 940,560
	To Sales		$ 940,560
4	Finished goods	$ 780,650
	To Cost of goods sold		$ 780,650
5	P/L	$ 935
	To provision for premium		$ 935
6	Premium	$ 1,100
	To creditors		$ 1,100
7	Accrued interest	$ 3,000
	To cash & cash equivalents		$ 3,000
8	Interest on 6% bond	$ 3,000
	To cash & cash equivalents		$ 3,000
9	Interest on 6% bond	$ 986
	To cash & cash equivalents		$ 986
10	Redemption of 6% bond	$ 101,000
	To cash & cash equivalents		$ 101,000
11	Cash & cash equivalents	$ 94,190
	To 5% Bond		$ 94,190
12	Interest on 5% bond	$ 1,657
	To interest accrued		$ 1,657
13	Amortization of discount on new 5% bond	$ 555
	To 5% Bond		$ 555
14	Selling & Admin Exp	$ 87,345
	To cash & cash equivalents		$ 87,345
15	Depreciation	$ 30,000
	To PPE		$ 30,000
16	Cash & cash equivalents	$ 906,450
	To customers		$ 906,450
17	Suppliers	$ 729,254
	To cash & cash equivalents		$ 729,254
18	Inventory	$ 689,525
	To suppliers		$ 689,525
19	Land	$ 30,000
	To cash & cash equivalents		$ 30,000

Income Statement -
Particulars	Amount ($)
Sales	$ 940,560
Less:COGS	$ 780,650
Gross Profit	$ 159,910
Interest on bond for 01-Jan-16 to 30-Jun-16	$ 3,000
Interest on bond for 01-Jul-16 to 31-Aug-16	$ 986
Selling & Admin expenses	$ 87,345
Premium paid on Bond	$ 1,000
Interest on 5% bond	$ 1,657
Depreciation	$ 30,000
Amortization	$ 9,600
Provision for premium	$ 935
Amortization of discount on new 5% bond	$ 555
Amortization of discount on Old 6% bond	$ 6,732
New Income	$ 18,100.00

Balance Sheet

Assets

Amount ($)

Amount ($)

Current Assets

Cash and cash equivalent

$ 4,935

Accounts Receivables

$ 54,630

Inventory

$ 225,935

Inventory of Premiums ( @$1.10 per premium)

$ 825

Total Current Assets

$ 286,325

Long Term Assets

Investments

$ 66,775

Property Plant and Equipment

$ 780,000

Less Accumulated Depreciation

$ 120,000

Total Long Term Assets

$ 726,775

Intangible Assets

$ 245,000

Less: Accumulated Amortization

$ 19,600

$ 225,400

Total Assets

$ 1,238,500

Equity & Liabilities

Amount ($)

Amount ($)

Current Liabilities

Accounts Payable

$ 13,093

Liability for Premiums and Coupons

$ 605

Accrued Interest on 5% Bonds Payable

$ 1,657

Total Current Liabilities

$ 15,355

5% Bonds Payable due 2020

$ 100,000

Unamortized Discount on Bonds Payable

$ 6,410

$ 93,590

Total Liabilities

$ 108,945

Stockholder's Equity

Common Stock

125,000 shares, par value $1 authorized

100,000 shares issued and outstanding

$ 130,000

Paid inCapital in Excess of Par

$ 946,000

Retained Earnings

$ 53,555

$ 1,129,555

Total Liability & Stockholders' Equitynotes

Cash and Cash equivalents	Amount ($)
Opening balance	$ 11,980
Litigation	$ -45,000
Purchase of premium	$ -1,100
Interest on 6% bond	$ -6,986
6% bon redeemed	$ -101,000
5% bond issued	$ 94,190
Cash collected from customer	$ 906,450
Cash paid to supplier	$ -728,254
Short term note redeemed	$ -8,000
Selling Exp	$ -87,345
Land purchased	$ -30,000
Cloaing Balance	$ 4,935
Accounts Payable	Amount ($)
Opening balance	$ 50,722
Inventory purchase	$ 689,525
Purchase of premium	$ 1,100
Cash paid to supplier	$ -728,254
Cloaing Balance	$ 13,093
Accounts receivable	Amount ($)
Opening balance	$ 20,520
Sales	$ 940,560
Collection	$ -906,450
Cloaing Balance	$ 54,630
Inventory	Amount ($)
Opening balance	$ 317,060
COGS	$ -780,650
Purchase	$ 689,525
Cloaing Balance	$ 225,935

$ 1,238,500