i need this step by step pls...
CROWN and PRINCE Crown&Prince are virtually identical companies; both companies began operations at the beginning of 2018 by issuing 20,000 shares, $5.00 par common stock $100,000 and long term debt of $200,000 During the year, both companies purchased inventory as follows Jan-18 Apr-18 Aug-18 Nov-18 units Unit cost 10,000 10,000 10,000 10000 S7 $4.00 $5.00 6.00 $7.00 Total Cost 40,000 $50,000 $60,000 S70,000 $220,000 40,000 CROWN uses the frst-in, first-out (FIFO) method, and PRINCE uses the last-in, last-out (LIFO) method of inventory. Both companies sold 35,000 units. QUESTION 1 Compute the COST OF GOODS SOLD and INVENTORY for each company. SHOW YOUR CALCULATIONS CROWN PRINCE 6 COGS COGS 28 31 Inventory 32 Inventory Inventory 34 35 During the year, both companies had sales (all for credit) of $500,000 34 35 During the year, both companies had sales (all for credit) of $500,000 36 QUESTION 2: Prepare the following portion of the Income Statement 38 39 40 PRINCE CROWN 41 2 Sales Revenue 43 44 COGS 45 46 Gross Profit 47 481, GP%| 49 50 51 Crown uses the percent of sales method to establish a reserve for bad debt; Prince uses 52 the Aging of Accounts Receivable 54 CROWN Estimated PERCENT OF SALES 55 FOR BAD DEBT 56 3% 7 PRINCE AGING OF A/R at 12/31/2018 AGING 50 Total 60 $110,000 61 62 Estimated % of 63 Uncoliectiblwe CurrentNIT 1-30 31-60 61-90 over 90 days $50,000 $25,000 $15,000$10,000$10,000 2% 5% .. 10%| 20% 35%, $1000 $1 250 $1,500$2.000$3,500 049.260 06 69 70 2QUESTION 3 Determine the BAD DEBT EXPENSE for each company 75 76 Bad Debt Expense 78 79 80 I 81 lve & no salvage value CROWN USES the STRAIGHT LINE METHOD method of depreciation PRINCE USES the E-DECLINING BALANCE merhod of 84 QUESTION4 86 89 DEPRECIAION EXP FOR 2018 91 Vi 93 94 95 yr end 101 QUESTION 5: Complete the income Statement 102 103 PRINCE CROWN NCOME STATEMENT INCOME STATEMENT For the year ending Dec. 31, 2018 For the year ending Dec. 31, 2018 105 106 Sales Revenue 107COGS 109 Gross Profit 110 Gp% 111Selling General & Adm. Expenses 112 113 114 115 Depreciation Exp Bad Debt Exp $175,000 $175,000 19 Total SGA $175,000 120 121 Net INCOME before $175 000 Income Tax t23 | Income Tax (30%) 124 25 NET INCOME 126 127 130 Both companies paid dividend of S 10,000 to the stockholders 0Both companies paid a dividend of $10,000 to the stockholders 34 QUESTION 6: Complete the Statement of Retained Earnings CROWN PRINCE Statement of Retained Earnings For the year ending Dec. 31. 2018 Statement of Retained Earnings For the year ending Dec. 31,2018 37 41Retained Eamings, 1/1 43 Net Income 144 45 Dividends 47Retained Earnings.12 148 12/31/18 EPS Net Income -Preferred 152 153 154 Average of shares outstanding
