Hi - would like help answering Part 1 and Part 2 at the end of the worksheet, please! Thank you!

Part 1: Prepare the income statement

Part 2: Prepare the balance sheet

Module 2 Comprehensive Example and Assignment Jayhawk Socks, Ltd. Jayhawk Socks, Ltd. purchases high-quality designer socks from various wholesalers, packages the socks with attractive labeling, and resells them to various retailers. The following information includes the balance sheet as of December 31, 2014, and details of the transactions that occurred during 2015. Requirements The transactions that occurred during 2015 have been recorded in T-accounts. Prepare the income statement and balance sheet for Jayhawk Socks, Ltd. for the year ending December 31, 2015. Jayhawk Socks, Ltd. Balance Sheet As of December 31, 2014 Assets: Cash Accounts Receivable Liabilities: $5,000 Accounts Payable 3,000 Wages Payable 170 500 Interest Payable 90 Prepaid Rent Merchandise Inventory 4,000 Notes Payable Property, Plant & Equipment 20,00 Equity: 0 Less: Accumulated Depreciation (3,500) 16,500 Common Stock (3,750 shares) Additional Paid-in Capital Retained Earnings Total Assets $2,500 $29,000 Total Liabilities & Equity 2,700 3,750 11,250 8,540 $29,000 1 Module 2 Comprehensive Example and Assignment Journalize Transactions 1. The company issued 800 shares of common stock for $4,000. The par value of the stock is $1 per share. BALANCE SHEET INCOME STATEMENT Asset = Liabilities + Equity Revenues Expenses = Net Income + 4,000 2 Module 2 Comprehensive Example and Assignment + 4,000 - = Cash Common Stock Additional Paid-in Capital 4,000 800 3,200 3 Module 2 Comprehensive Example and Assignment * 800 shares x $1 par value = $800 Common Stock; $4,000 Market Value - $800 Par Value = $3,200 APIC 2. New equipment was purchased for $3,400. BALANCE SHEET INCOME STATEMENT Asset = Liabilities + Equity Revenues Expenses = 4 Module 2 Comprehensive Example and Assignment Net Income + 3,400 - 3,400 - = Cash Equipment (or PP&E) 3,400 3,400 5 Module 2 Comprehensive Example and Assignment 6 Module 2 Comprehensive Example and Assignment 3. Sales for the year were $29,000, all of which were on account. BALANCE SHEET INCOME STATEMENT Asset = Liabilities + Equity Revenues Expenses = Net Income + 29,000 + 29,000 7 Module 2 Comprehensive Example and Assignment + 29,000 - = + 29,000 Accounts Receivable Sales Revenue 29,000 29,000 8 Module 2 Comprehensive Example and Assignment Journalize Transactions 4. Collections on accounts receivable amounted to $26,500. BALANCE SHEET INCOME STATEMENT Asset = Liabilities + Equity Revenues Expenses = Net Income 9 Module 2 Comprehensive Example and Assignment + 26,500 - 26,500 - = Cash Accounts Receivable 26,500 26,500 10 Module 2 Comprehensive Example and Assignment 5. Purchases of designer socks during the year totaled $6,500. All purchases were made on account and debited to Merchandise Inventory. BALANCE SHEET INCOME STATEMENT Asset = Liabilities + Equity Revenues Expenses 11 Module 2 Comprehensive Example and Assignment = Net Income + 6,500 - 6,500 - = Merchandise Inventory Accounts Payable 6,500 6,500 12 Module 2 Comprehensive Example and Assignment 6. Payments to suppliers totaled $6,000 for the year. BALANCE SHEET INCOME STATEMENT Asset = Liabilities + 13 Module 2 Comprehensive Example and Assignment Equity Revenues Expenses = Net Income - 6,000 - 6,000 - = Cash Accounts Payable 6,000 14 Module 2 Comprehensive Example and Assignment 6,000 Journalize Transactions 7. Equipment with an original cost of $1,500 and a book value of $300 was sold for $450. BALANCE SHEET INCOME STATEMENT 15 Module 2 Comprehensive Example and Assignment Asset = Liabilities + Equity Revenues Expenses = Net Income + 150 + 150 + 150 - = + 150 Cash Equipment Accumulated Depreciation 16 Module 2 Comprehensive Example and Assignment 450 1,500 1,200 Gain on Sale 150 * Accum. Depr. = Original Cost - Book Value = $1,500 - 300 = $1,200; Gain on Sale = Sale Price - Book Value = $450 - 300 = $150 17 Module 2 Comprehensive Example and Assignment 8. A rent payment of $3,600 was made on March 1. The payment was for building rent and was prepaid for 12 months. (The company will record total rent expense in an adjusting entry at year end.) BALANCE SHEET INCOME STATEMENT Asset = Liabilities + Equity Revenues Expenses = Net Income - 3,600 + 3,600 18 Module 2 Comprehensive Example and Assignment - - Cash Prepaid Rent 3,600 3,600 19 Module 2 Comprehensive Example and Assignment 9. Employees were paid $12,000 in wages during the year. BALANCE SHEET INCOME STATEMENT Asset = Liabilities 20 Module 2 Comprehensive Example and Assignment + Equity Revenues Expenses = Net Income - 12,000 - 170 - 11,830 11,830 = - 11,830 Cash Wages Payable Wage Expense 12,000 21 Module 2 Comprehensive Example and Assignment 170 11,830 22 Module 2 Comprehensive Example and Assignment 10. Other selling, general, and administrative expenses totaled $3,500 and were paid in cash. BALANCE SHEET INCOME STATEMENT Asset = Liabilities + Equity Revenues Expenses = Net Income - 3,500 - 3,500 3,500 23 Module 2 Comprehensive Example and Assignment = - 3,500 Cash SG&A Expense 3,500 3,500 24 Module 2 Comprehensive Example and Assignment Journalize Transactions 11. On September 1, 2015, retired the note that was outstanding at the beginning of the period. The old note had a 10% interest rate, had been issued on September 1, 2013, and required semiannual interest payments on February 28 and August 31. (The beginning balance of $90 in Interest Payable represents interest that had been accrued for the period 9/1/14 to 12/31/14.) BALANCE SHEET INCOME STATEMENT Asset = Liabilities + Equity Revenues Expenses = Net Income - 135 - 90 25 Module 2 Comprehensive Example and Assignment - 45 45 = - 45 - 135 - 135 135 = - 135 - 2,700 - 2,700 - = 26 Module 2 Comprehensive Example and Assignment Cash Notes Payable Interest Payable 135 (2/28) 135 (2/28) 90 (8/31) 2,700 (9/1) 27 Module 2 Comprehensive Example and Assignment 2,700 (9/1) Interest Expense (2/28) 45 (8/31) 135 28 Module 2 Comprehensive Example and Assignment * Interest Expense = $2,700 x 10% = $270 x 8/12 = $180 12. Dividends of $3,000 were declared and paid. BALANCE SHEET INCOME STATEMENT Asset = Liabilities + 29 Module 2 Comprehensive Example and Assignment Equity Revenues Expenses = Net Income - 3,000 - 3,000 - = Cash Retained Earnings 3,000 30 Module 2 Comprehensive Example and Assignment 3,000 Adjusting Entries at 12/31/15 13. A count of physical inventories on December 31, 2015, revealed an ending inventory of $9,500. BALANCE SHEET INCOME STATEMENT Asset = 31 Module 2 Comprehensive Example and Assignment Liabilities + Equity Revenues Expenses = Net Income - 1,000 - 1,000 1,000 = - 1,000 Merchandise Inventory Cost of Goods Sold Bal. 4,000 32 Module 2 Comprehensive Example and Assignment (5) 6,500 1,000 1,000 Bal. 9,500 * Beginning Inventory + Purchases - Ending Inventory = COGS; $4,000 + 6,500 - 9,500 = $1,000 COGS 33 Module 2 Comprehensive Example and Assignment 34 Module 2 Comprehensive Example and Assignment 14. Depreciation for the PP&E on hand totaled $3,000 for the year. BALANCE SHEET INCOME STATEMENT Asset = Liabilities + Equity Revenues Expenses = Net Income - 3,000 - 3,000 3,000 35 Module 2 Comprehensive Example and Assignment = - 3,000 Accumulated Depreciation Depreciation Expense 3,000 3,000 36 Module 2 Comprehensive Example and Assignment 15. Rent expense was recorded for the year, which included $500 for January and February and $3,000 ($300 per month) for March through December. BALANCE SHEET INCOME STATEMENT Asset = Liabilities + Equity Revenues Expenses = Net Income - 3,5600 -3,5500 3,500 37 Module 2 Comprehensive Example and Assignment -3,500 Prepaid Rent Rent Expense 3,500 3,5600 38 Module 2 Comprehensive Example and Assignment 39 Module 2 Comprehensive Example and Assignment Post Journal Entries to Accounts 40 Module 2 Comprehensive Example and Assignment Cash Accounts Receivable Bal 5,000 3,400 (2) Bal 3,000 (1) 4,000 6,000 (6) (3) 29,000 (4) 26,500 3,600 (8) Bal 5,500 (7) 450 12,000 Bal (9) (8) 3,600 Bal 600 Bal 4,000 Bal 20,000 2,970 (11) (5) 6,500 (2) 3,000 (12) 3,000 (14) 9,500 Bal 21,900 Wages Payable 2,500 Bal (6) 6,000 6,500 (5) (9) Notes Payable Bal 90 Additional Paid-in Capital 3,200 (1) Bal Retained Earnings (12) (1) 4,550 Bal Sales Revenue 8,540 Bal 29,000 (3) 5,540 Bal 29,000 Bal 3,000 14,450 Bal Cost of Goods Sold Expense Gain (Loss) on Sale Bal 800 0 11,250 Bal 0 3,750 Bal 2,700 Bal Bal Common Stock 2,700 Bal (11) 170 170 3,000 Bal Interest Payable 0 1,500 (7) Accounts Payable 5,300 Bal 90 3,400 1,000 (13) Bal 3,500 (15) PP&E (10) 3,500 Bal (11) 500 Merchandise Inventory Accumulated Depreciation 1,200 Bal 3,500 1,480 (7) 26,500 (4) Prepaid Rent Depreciation Expense 150 (7) (13) 1,000 (14) 3,000 150 Bal Bal 1,000 Bal 3,000 41 Module 2 Comprehensive Example and Assignment Post Journal Entries to Accounts Rent Expense Wage Expense SG&A Expense (15) 3,500 (9) (10) 3,500 Bal 3,500 Bal 11,830 Bal 3,500 11,830 Interest Expense (11) 180 Bal 180 42 Module 2 Comprehensive Example and Assignment Module 2 Assignment: Prepare the 2015 1) income statement and 2) balance sheet for Jayhawk Socks. 1. Income Statement ? ? ? Revenues: Expenses: Net Income 43 Module 2 Comprehensive Example and Assignment 2. Balance Sheet ? ? ? Assets: Liabilities: Cash Accounts Rec Total Liabilities Prepaid Rent Stockholders' Equity Merchandise Total Current Assets Total Stockholders' Equity Total Assets Total Liabilities & Equity 44