Previous Page Next Page Page 6 of 6 Question 6 (27 points) During 2019, Grizzly Retail Store, a retailer of collegiate apparel, had total sales of $156,200, of which $90,900 was paid for with cash and $65,300 was paid on account. The merchandise sold to the customers cost Grizzly $14,990. Throughout the year, Grizzly incurred the other costs: $3,500 in advertising: $10,800 in rent; $20 in interest; $60,000 in salary costs (one employee); $2,300 in utilities, and used $450 worth of supplies. Grizzly uses straight-line depreciation for their equipment. Grizzly estimated the equipment to have a salvage value of $500 and a useful life of 5 years. The equipment was purchase on January 1, 2017. At the end of the year, Grizzly chose to pay out $15,000 in dividends. Grizzly had a beginning balance for retained earnings of $10,749. The account balances for the beginning and end of the year are as follows: January 1 December 31 Cash $62,860 $85,974 Accounts Payable 980 1,950 Supplies 150 200 Common Stock 50,000 50,000 Inventory 2,160 6,620 Prepaid Rent 2,000 3,200 Land 1,400 1,400 Unearned Revenue 900 Equipment 4,000 4,000 Accounts Receivable 20,500 13,500 Income Tax Payable Accumulated Depreciation Allowance for Doubtful Acct. Retained Earnings 10,749 Additional Information: 1. At the end of 2019, Grizzly Retail Store estimates that its bad debt will amount to 2% of its sales revenue. 2. Sales tax on all revenue is equal to 6%. Sales tax payables were pay off, in total, prior to the financial statements being completed (i.e. no sales tax payable account). 3. Salaries payables and payroll tax payables were paid off, in total, prior to the financial statements being completed (i.e. no salaries payable or payroll tax payable accounts). 4. Income tax on the salary is equal 11%. Income taxes have not been paid, by December 31, and the amount remains in the appropriate account. Required: a. Using the financial statement templates, prepare the following financial statements for Grizzly Previous Page Next Page Page 6 of 6 Question 6 (27 points) During 2019, Grizzly Retail Store, a retailer of collegiate apparel, had total sales of $156,200, of which $90,900 was paid for with cash and $65,300 was paid on account. The merchandise sold to the customers cost Grizzly $14,990. Throughout the year, Grizzly incurred the other costs: $3,500 in advertising: $10,800 in rent; $20 in interest; $60,000 in salary costs (one employee); $2,300 in utilities, and used $450 worth of supplies. Grizzly uses straight-line depreciation for their equipment. Grizzly estimated the equipment to have a salvage value of $500 and a useful life of 5 years. The equipment was purchase on January 1, 2017. At the end of the year, Grizzly chose to pay out $15,000 in dividends. Grizzly had a beginning balance for retained earnings of $10,749. The account balances for the beginning and end of the year are as follows: January 1 December 31 Cash $62,860 $85,974 Accounts Payable 980 1,950 Supplies 150 200 Common Stock 50,000 50,000 Inventory 2,160 6,620 Prepaid Rent 2,000 3,200 Land 1,400 1,400 Unearned Revenue 900 Equipment 4,000 4,000 Accounts Receivable 20,500 13,500 Income Tax Payable Accumulated Depreciation Allowance for Doubtful Acct. Retained Earnings 10,749 Additional Information: 1. At the end of 2019, Grizzly Retail Store estimates that its bad debt will amount to 2% of its sales revenue. 2. Sales tax on all revenue is equal to 6%. Sales tax payables were pay off, in total, prior to the financial statements being completed (i.e. no sales tax payable account). 3. Salaries payables and payroll tax payables were paid off, in total, prior to the financial statements being completed (i.e. no salaries payable or payroll tax payable accounts). 4. Income tax on the salary is equal 11%. Income taxes have not been paid, by December 31, and the amount remains in the appropriate account. Required: a. Using the financial statement templates, prepare the following financial statements for Grizzly