Question
I really need help on Mini Case below. Any help is much appreciated !! Jacoby Corporation, a merchandiser, recently completed its calendar year 2013 operations.
I really need help on Mini Case below. Any help is much appreciated !!
Jacoby Corporation, a merchandiser, recently completed its calendar year 2013 operations. For the year: All sales are credit sales All credits to Accounts Receivable reflect cash receipts from customers All purchases of inventory are on credit All debits to Accounts Payable reflect cash payments for inventory Other expenses are paid in advance and are initially debited to Prepaid Expenses. The companys balance sheets and income statement follow.
Jacoby Corporation Balance Sheet December 31, 2012 and 2013
2013 | 2012 | |
Assets | ||
Cash | $136,500 | $71,550 |
Accounts Receivable | $74,100 | 90,750 |
Merchandise inventory | 454,500 | 490,200 |
Prepaid expenses | 17,100 | 19,200 |
Equipment | 278,250 | 216,000 |
Accumulated depreciation | (108,750) | (93,000) |
Total Assets | $851,700 | $794,700 |
Liabilities | ||
Accounts payable | $117,450 | $123,450 |
Short term notes payable | 17,250 | 11,250 |
long term notes payable | 112,500 | 82,500 |
common stock $ 5 par | 465,000 | 450,000 |
Paid in capital in excess | 18,000 | 0 |
Retained earnings | 121,500 | 127,500 |
TOTAL Liabilities | $851,700 | $794,700 |
Jacoby Corporation Income Statement December 31, 2013
Sales | $1,083,000 | |
Cost of goods sold | 585,000 | |
Gross profit | 498,000 | |
Operating Expenses | ||
Depreciation expense | $36,600 | |
Other expenses | 392,850 | |
Total Operating Expenses | 429,450 | |
68,550 | ||
Gain and losses | ||
loss on sale of equipment | 2,100 | |
Income before Taxes | 66,450 | |
Income Tax expense | 9,450 | |
Net income | $57,000 |
Additional Information on Year 2011 Transactions
a. The loss on the cash sale of equipment was $2,100 (details in b).
b. Sold equipment costing $51,000, with accumulated depreciation of $20,850, for $28,050 cash.
c. Purchased equipment costing $113,250 by paying $38,250 cash and signing a long-term note payable for the balance
d. .
e. Borrowed $6,000 cash by signing a short-term note payable.
f. Paid $45,000 cash to reduce the long-term notes payable.
g. Issued 3,000 shares of common stock for $11 cash per share.
h. Declared and paid cash dividends of $63,000.
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