In 2016, Joseph and Michael formed Exotic Cars, LLC.

Exotic Cars LLC sells the rarest exotic cars. The firm is a registered international dealer, regulated by New York State and the SEC. Any depreciable assets should be depreciated and recorded appropriately in each of the financial statements.

Below are all the transactions for the 2016 calendar year.

The company was formed

The owners pay $500,000 each (PIC) for a total of 1,000,000 shares.

Purchase a dealership for $3,500,000; $500,000 cash deposit and a $3,000,000 fifteen year nonrecourse mortgage from a bank. The building is consider commercial.

Purchased $275,000 of equipment on invoice from Motors Corp

Purchased furniture and computers, $50,000 and $125,000 respectively both on invoice.

Provides $12,000 in car detailing, and invoices a customer $12,000. The customer paid $6,000 cash at the time of invoicing, and are expected to pay the remaining $6,000 within 60 days.

The company incurs and pays salary expenses of $4,500, in cash each month.

Mechanics rent each of the six bays for $2,500 per month.

First there first Ferrari 488 sider in February for $252,750. Customer paid one half in cash and financed the balance with a company note at 2.76% for 18 months.

Record the finance revenue from 9 above starting in March.

Heating utility is on account with MoJo Heating & Gas for a level pay costs of $2400 per month.

The firm leases the adjacent land for special storage on a monthly basis for $1,500.

March 9^th, sold their first Lamborghini for $199, 500 plus $22, 700 of special performance add-ons. Customer paid 60 percent of the total and financed the balance with a company note at 3.76% until years end.

Record the finance revenue from 13.

May 4^th, sold a McLaren 720s for $305,600, $105,600 cash at the time of the transaction and equal payments thereafter starting the month after. Finance charges at $2.25%.

May 9^th, sold a Porshe 911 Turbo for $200, 500 for cash.

June 30^th paid dividends $10,000 to each owner celebrating 6 months of business.

July 15^th, first exotic car rental event; seven exotic cars rented for 2 hour track rides. Each car rental is a $125 one time training fee, $350 car rental and $75 track fee. All participants paid cash.

August, company bought 23 exotic cars on account for $3,750,000 held for future sales.

August 19^th, Customer special ordered a custom Rolls Royce Phantom for $485,000 to be delivered on September 24^th.

September 15^th, the Porsche sold on May 9^th is returned for collision repairs costing $27,500 on invoice. The repaired car is returned to the owner on September 24^th.

October 31, Collision repair is paid in cash.

October 31, Detailing and performance kit for a LaFerrari convertible, $53,275. Invoiced, financed for 18months at 3.85%.

November 1, Isabella and Julianna join as partners each for a $1,000,000 for a total of 1,000,000 shares.

November 12^th, sold Ferrari Portofino for $215,250.

November 16^th, sold a Bugatti Chiron for $2,500,000 at an auction.

December 4^th, sold a Bentley Continental GT for $240, 500.

December 14^th, sold Lamborghini Centenario for $1,900,000.

The company pays all its owners $25,000 dividend.

Required:

Prepare annual income statement as of December 31, 2016.