M2. SERVICE COMPANY FINANCIAL STATEMENTS Note: For a problem using the sole proprietorship form of business organization, download PFS from the website for this book found at cengagebrain.com. The ledger of Skitch Corp. showed the following balances after adjustment on June 30, 2012, the end of the current fiscal year: Accounts payable $ 55,600 General expenses $112,350 Accounts receivable 103,890 Interest expense 6,750 Accumulated 26,250 depreciation-equipment Notes payable 46,335 Cash 80,370 Prepaid insurance 10,125 Common stock 300,000 Retained earnings, July 1, 0 Salaries expense 621,450 2011 Dividends 18,000 Sales 943,500 Equipment 280,000 Advertising expense 138,750 The president of Skitch has asked you to develop a financial statement worksheet (file name FFS) that includes a single-step income statement, a statement of retained earnings, and a balance sheet. This worksheet will allow the financial statements to be prepared quickly by entering account balances in the appropriate cells on the worksheet. Use the information provided as input for your worksheet. Review the Model-Building Problem Checklist on page 154 to ensure that your worksheet is complete. Print the worksheet when done. Check figure: Total assets, $448,135. To test your model, use the following data for the year ended June 30, 2013: Accounts payable $ 67,050 General expenses $ 108,150 Accounts receivable 92,700 Interest expense 9,000 Accumulated 52,500 depreciation equipment Notes payable 44,085 Cash 72,400 Prepaid insurance 10,800 Common stock 300,000 Retained earnings, July 1, 46,200 Salaries expense 659,835 2012 Dividends 0 Sales 892,500 Equipment 320,000 Advertising expense 129,450 Print the worksheet when done. Check figure: Total assets, $443,400. CHART (optional) Utilizing the test data worksheet, prepare a pie chart depicting the percentage of each expense to total expenses. Print the chart when done. FFS Service Company Financial Statements Skitch Corp Income Statement For Year Ended June 30, 20XX 892500 Revenue Sales Expenses Salaries expense Selling expenses General expenses Interest expense Total expenses Not income 659835 129 450 108, 150 9.000 906 435 $906 435 Skitch Corp Statement of Retained Eamings For Year Ended June 30, 20XX $13.935 Retained eamings, beginning Net income for the year Less dividends Net change in retained eamings Retained eamings, ending Skitch Corp Balance Sheet As of June 30 20XX $80.370 103 890 Assos Current Assets Cash Accounts receivable Merchandise inventory Prepaid insurance Total current assets Plant Assets Equipment Less accumulated depreciation Total plant assets Total assets 10.125 $194 385 $280.000 25 250 $253.750 $443 400 Liabilities Accounts payable Notes payable Total liabilities $55 600 46.335 $101.935 $300.000 Stockholders' Equity Common stock Retained oamings Total stockholders' equity Total liabilities and equity $300.000 $401.935
