On January 2, 2018, Amelia Young sat down to prepare the 2017 financial statement for her fly repellant business Repelfly, a sole proprietorship, which her great grandfather Jack McClary started in 1909 In this business, Amelia purchases citronella and other ingredients to make blackfly repellant, which she then sells to independent outfitting stores in Northern Ontario The balance sheet as of December 31, 2016 read as follows Current Assets Cash: Accounts Receivable Inventory (Citronella) Inventory (WIP): Inventory (Finished goods) Fixed Assets Bottling Equipment Less: Acc. Depreciation: Net Equipment $45,200 $4,500 $800 $0 $500 $5,600 ($1,400) $4,200 Total Assets $55,200 Current Liabilities Citronella Account Payable: Fixed Liabilities Bank Loan Outstanding Total Liabilities $1,300 $8,700 $10,000 $45,200 $55,200 Total Equity Total Liability and Equity After gathering all the receipts, payment slips and bank statements, Amelia was able to make the following list of 2017 cash receipts and disbursements Receipts: Sales Receipt: $57,000 Disbursements Payments to citronella supplier Wages (William) Wages (Sophie) Salary (Amelia) Bank Payment Miscellaneous (administrative): $14,000 $5,640 $3,000 $18,000 $1,700 $2,500 Amelia was happy with the high level of sales (her sales beat William's when he ran the company). At the end of the year, customers owed her $3,400. Amelia decided to keep the accounts paid up fully and at the end of the year, she did not owe the citronella supplier anything Amelia's assistant William was contracted to be paid $12/hour. He worked 10 hours a week for 50 weeks during 2017. William spent three quarters of his time making fly repellant and the other quarter doing administrative work. At the end of the year William had performed three weeks' worth of work for which he hadn't been paid by the end of the year Amelia's sister Sophie was contracted to be paid $15/hour. She worked for 4 hours a week for 50 weeks during the year in 2017. Sophie spent all of her time working on the website and other administrative work. She had been paid her full wage at the end of the year Amelia is depreciating the bottling equipment and other rendering tools over 8 years with no salvage value. The bank payment included $200 of interest Amelia paid herself $18,000 for the year and spent one third of her time making fly repellant; the rest of the time she was dealing with customers and suppliers. On the same January 2nd 2018, William did a quick inventory count, and counted $1,800 worth of citronella and other raw materials. He could not find any partially finished work. He also found 800 bottles that took him 5 hours to make and had $100 worth of citronella in total. The bottles can be sold for $4,800 in total. a) What does Repelfly's cash T-account look like for 2017? (5 marks) b) What are the sales for Repelfly in 2017? (5 marks) c) What is the total cost of goods sold (COGS) expense for Repelfly in the year 2017? Show the entries in all three inventory T-accounts that are relevant to the calculation. (5 marks) d) Prepare the 2017 Income Statement for Repelfly. (10 marks) e) Prepare the Balance Sheet for Repelfly for the end of the year 2017. (10 marks)
