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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

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
Inventory of Premiums ( @$1.10 per premium) 660
Total Current Assets 350,220
Long Term Assets
Investments 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 due on March 31,2016 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 20years
There was a litiagation brought out by a competitor against the Trade Mark. GeneralProduct could successfully
defended 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 totalled $ 940,560. COGS are $780,650.
3 Included in the total sales of $940,560 are the sales of GeneralProducts brand 6000 soap powder boxes
GeneralProducts includes one coupon in every soap powder box. Customers can redeem 4 coupons for one
Kitchen untensil. Based on past experience 60% of the coupons are redeemed by customers.
During 2016 3,400 coupons were redeemed. Purchase of premiums during 2016 totalled
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 semiannualy on Jan 1st and June 30th.
General Products can redeem these Bonds any time after June 30,2016 @ 101.
5 To take advantage of lower interst rates and to finance the redemption of 6% Bonds,
on Sept.1st 2016, GeneralProducts 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 semiannually 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 Striaght Line Method over 25 years of life.
7 Cash collected from customers totalled $906,450
8 Cash paid to suppliers for credit purchases totalled $728,254
9 Purcahses of inventory totalled $ 689,525.All purchases are on credit.
10 GeneralProducts purchased Land for $30,000 for construction of building
Requirements
1 Record the necessary journal entries for 2016
2 Prepare Income Statement and Retained Earnings Statement for the year 2016
3 Prepare Balance Sheet on December 31,2016
4 Show full work of all the financial items reported in Income Statement and Balance Sheet.
Please round your calculations closest to $. Ignore tax.
Check Figures:
Income Statement
Net Income 18,200.00
Retained Earnings 53,655.00
Operating Income 31,783.00
Balance Sheet
Total Assets 1,238,692.00
Liabilities 109,037.00
Current Assets 286,709.00

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