GeneralProducts Inc. is incorporated in Nevada, USA on Jan 1st 2013 to take over a local retail chain. The objective of the company is to supply goods of everyday use to customers at the most competitive prices. GeneralProducts has established a chain of stores throughout USA. The retail operations of the company are so designed that customers can shop seamlessly in stores and online.

You may use the attachedBalance Sheet of GeneralProducts as of Dec 2015and the financial data for 2016.The same information is provided below.

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Description GeneralProducts Inc. is incorporated in Nevada, USA on Jan 1st 2013 to take over a local retail chain. The objective of the company is to supply goods of everyday use to customers at the most competitive prices. GeneralProducts has established a chain of stores throughout USA. The retail operations of the company are so designed that customers can shop seamlessly in stores and online. You may use the attached Balance Sheet of GeneralProducts as of Dec 2015 and the financial data for 2016.The same information is provided below. Balance Sheet of GeneralProducts Inc. on December 31, 2015 ASSETS Current Assets Cash and Cash Equivalent Accounts Receivables Inventory Inventory of Premiums (@0.10 per premium) 11,9 80 20,5 20 317, 060 660 Total Current Assets 350,2 20 LONG TERM ASSETS Investments 66,7 75 Balance Sheet of GeneralProducts Inc. on December 31, 2015 Property Plant and Equipment Less Accumulated Depreciation 750, 000 90,0 00 660, 000 Total Long Term Assets 726,7 75 INTANGIBL E ASSETS Trade Marks 190,0 00 Total Assets 1,266 ,995 LIABILITIE S AND SHAREHO LDERS' EQUITY Current Liabilities Accounts Payable 50,7 72 Liability for Premiums and Coupons 550 5% Short Term Notes Payable due on March 31, 2016 Accrued 8,00 0 Balance Sheet of GeneralProducts Inc. on December 31, 2015 Interest on 6% Bonds Payable 3,00 0 Total Current Liabilities 6% Bonds Payable due 2020 Unamortized Discount on Bonds Payable 62,27 2 100, 000 6,73 2 Total Liabilities 93,26 8 155,5 40 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 Total 35,4 55 1,111 Balance Sheet of GeneralProducts Inc. on December 31, 2015 nStockholder s' Equity ,455 Total Liabilities and Stockholders ' Equity 1,266 ,995 GeneralProducts provides us financial and business related data for 2016 below. 1. 2. 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. GeneralProducts 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. 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 GeneralProducts brand 6000 soap powder boxes GeneralProducts 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-annualy 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 interest 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 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 Striaght 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. Purcahses of inventory total $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. General Products Inc. Income statement For the year ended December 2016 Sales $ 940,560 Less: Cost of Goods Sold 780,650 Gross profit 159,910 Expenses Premium liability expense $935 Legal fees $45,000 Depreciation expense $30,000 Selling administrative expense $87,345 $5,667 Interest expense Total expenses 168,947 Net loss (9,037) General Products Inc. Statement of Retained earnings For the year ended December 2016 Beginning retained earnings Less: Net loss Ending retained earnings 35,455 9,037 26,418 General Products Inc. Balance Sheet As at 31st December 2016 ASSETS $ $ Current Assets Cash and Cash Equivalent 12,831 Accounts Receivables 54,630 Inventory 225,935 Inventory of Premiums (@0.10 per premium) 660 Total current assets 294,056 Long Term Assets Land 30,000 Investments 66,775 Property Plant and Equipment 750,000 Accumulated depreciation PP$E 120,000 Total Long Term Assets 630,000 726,775 Intangible Assets Trademarks 190,000 Total Assets 1,210,831 LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities Accounts Payables 12,043 Liability for Premiums and Coupons 1,485 Accrued Interest on 5% Bonds Payable 1,667 Total Current Liabilities 15,195 5% Bonds Payable 100,000 Unamortized Discount on Bonds Payable 6,732 Total long term liabilities 93,268 Total liabilities 108,463 Shareholders' equity 125,000 shares, par value $1 authorized 100,000 shares Issued and outstanding 130,000 Paid in Capital in Excess of Par 946,000 Retained Earnings 26,418 Total Stockholders' Equity 1,102,418 Total 1,210,831 Liabilities and Stockholders' Equity 1. Journal entries for 2016 1. Legal fees $45,000 Cash (To record payment of litigation fee) 2. Accounts Receivables Sales (To records sales on credit) $45,000 $ 940,560 $ 940,560 3. Premium Liability expense Premium expense $935 Premium liability $935 4. For January 1st 2016 Accrued expense $3,000 Cash $3,000 (To record interest payment on accrued interest for December 2015) For June 30th 2016 Interest expense $3,000 Cash $3,000 (To record interest payment on June 2016) 5. On September 1st 2016 6% bond payable $101,000 5% bonds payable $100,000 Discount on 6% bond payable $1,000 (To record the redeeming 6% bond by the use of 5% bonds) On December 31st Interest expense $1,667 Accrued interest expense $1,667 (To record 4 months interest accrued on the 5% bond) Interest expense Cash $1,000 $1,000 (To record payment of interest on 6% bonds for two months) 6. Depreciation on PP $ E Depreciation Expenses $30,000 Accumulated depreciation $30,000 (To record depreciation expense for 2016 on PP$E) 7. Cash $906,450 Accounts Receivable $906,450 (To record of the cash received from customers) 8. Accounts payable $728,254 Cash $728,254 (To record cash paid to suppliers) 9. Purchases $689,525 Accounts payable (To record purchase of inventory on credit) 10. Land Cash $689,525 $30,000 $30,000 (To record the purchase of land for construction) 11. 5% Short Term Notes Payable $8,000 Cash $8,000 (To record the maturity of the 5% Notes Payable) Workings 3. = (6000 x 60% = 3600 coupon = 3600 - 3400 = 200 / 4 = 50 x 1.1 =55 =1,000 *1.1 = 1, 100 = 1100- (200*1.1) - 55 = $935 4. 6% /2 = 3% 3% * $100,000 = $3,000 5. Redeeming the 6% bond at 101 = 1.01 * 100,000 = 101,000 2 months interest on 6 % bonds = (3000/6) * 2 = $1,000 4 months interest on 5% bond = ($2,500/6)*4 = $1,667 6. Deprecation on PP&E = Depreciation expense = $750,000/25 =$30,000 Cash balance = $11,980 + (-45,000 -3,000 -3000-1,000 + 906,450 - 728,254 - 30,000$87,345 -8,000) = $12,831 Account receivable balance = 20,520 + (940,560 - 906,450) = $54,630 Accounts payable balance = 50,772 + ($689,525 - 728,254 ) = $12,043 Liability for Premiums and Coupons balance = 550 + 935 = $1,485 Ending inventory = 689,525 + 317,060 - 780,650 = $225,935 General Products Inc. Income statement For the year ended December 2016 Sales $ 940,560 Less: Cost of Goods Sold 780,650 Gross profit 159,910 Expenses Premium liability expense $935 Legal fees $45,000 Depreciation expense $30,000 Selling administrative expense $87,345 $5,667 Interest expense Total expenses 168,947 Net loss (9,037) General Products Inc. Statement of Retained earnings For the year ended December 2016 Beginning retained earnings Less: Net loss Ending retained earnings 35,455 9,037 26,418 General Products Inc. Balance Sheet As at 31st December 2016 ASSETS $ $ Current Assets Cash and Cash Equivalent 12,831 Accounts Receivables 54,630 Inventory 225,935 Inventory of Premiums (@0.10 per premium) 660 Total current assets 294,056 Long Term Assets Land 30,000 Investments 66,775 Property Plant and Equipment 750,000 Accumulated depreciation PP$E 120,000 Total Long Term Assets 630,000 726,775 Intangible Assets Trademarks 190,000 Total Assets 1,210,831 LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities Accounts Payables 12,043 Liability for Premiums and Coupons 1,485 Accrued Interest on 5% Bonds Payable 1,667 Total Current Liabilities 15,195 5% Bonds Payable 100,000 Unamortized Discount on Bonds Payable 6,732 Total long term liabilities 93,268 Total liabilities 108,463 Shareholders' equity 125,000 shares, par value $1 authorized 100,000 shares Issued and outstanding 130,000 Paid in Capital in Excess of Par 946,000 Retained Earnings 26,418 Total Stockholders' Equity 1,102,418 Total 1,210,831 Liabilities and Stockholders' Equity 1. Journal entries for 2016 1. Legal fees $45,000 Cash (To record payment of litigation fee) 2. Accounts Receivables Sales (To records sales on credit) $45,000 $ 940,560 $ 940,560 3. Premium Liability expense Premium expense $935 Premium liability $935 4. For January 1st 2016 Accrued expense $3,000 Cash $3,000 (To record interest payment on accrued interest for December 2015) For June 30th 2016 Interest expense $3,000 Cash $3,000 (To record interest payment on June 2016) 5. On September 1st 2016 6% bond payable $101,000 5% bonds payable $100,000 Discount on 6% bond payable $1,000 (To record the redeeming 6% bond by the use of 5% bonds) On December 31st Interest expense $1,667 Accrued interest expense $1,667 (To record 4 months interest accrued on the 5% bond) Interest expense Cash $1,000 $1,000 (To record payment of interest on 6% bonds for two months) 6. Depreciation on PP $ E Depreciation Expenses $30,000 Accumulated depreciation $30,000 (To record depreciation expense for 2016 on PP$E) 7. Cash $906,450 Accounts Receivable $906,450 (To record of the cash received from customers) 8. Accounts payable $728,254 Cash $728,254 (To record cash paid to suppliers) 9. Purchases $689,525 Accounts payable (To record purchase of inventory on credit) 10. Land Cash $689,525 $30,000 $30,000 (To record the purchase of land for construction) 11. 5% Short Term Notes Payable $8,000 Cash $8,000 (To record the maturity of the 5% Notes Payable) Workings 3. = (6000 x 60% = 3600 coupon = 3600 - 3400 = 200 / 4 = 50 x 1.1 =55 =1,000 *1.1 = 1, 100 = 1100- (200*1.1) - 55 = $935 4. 6% /2 = 3% 3% * $100,000 = $3,000 5. Redeeming the 6% bond at 101 = 1.01 * 100,000 = 101,000 2 months interest on 6 % bonds = (3000/6) * 2 = $1,000 4 months interest on 5% bond = ($2,500/6)*4 = $1,667 6. Deprecation on PP&E = Depreciation expense = $750,000/25 =$30,000 Cash balance = $11,980 + (-45,000 -3,000 -3000-1,000 + 906,450 - 728,254 - 30,000$87,345 -8,000) = $12,831 Account receivable balance = 20,520 + (940,560 - 906,450) = $54,630 Accounts payable balance = 50,772 + ($689,525 - 728,254 ) = $12,043 Liability for Premiums and Coupons balance = 550 + 935 = $1,485 Ending inventory = 689,525 + 317,060 - 780,650 = $225,935