Question #1 - (20 marks)

Based on the Chart of Accounts in Appendix A for JJ SPORTS Inc. create the Income Statement, Balance Sheet and Statement of Changes of Owners Equity for both 2019 & 2020.

Use the templates provided for how they should look.

oEnsure you include all the accounts (do not just put totals). Example, there should be no Net Fixed Assets etc.

Company's tax rate is 35%.

Retained Earnings are beginning balances, as of January 1^st each year. You must calculate their ending balances for the Statement of Changes of Owners Equity.

31-Dec-19 31-Dec-20 _ Balance Balance Account _ Debit Credit Debit Credit Cash S 902,500 S 1,657,125.0 Accounts Receivable S 387,500 S 597,500 Office Supplies S 87,500 S 127,500 Manufacturing Equipment S 1,500,000 S 1,500,000 Inventory S 430,000 S 800,000 Acc. Depreciation Equipment S 600,000 S 750,000 Accounts Payable S 212,500 S 425,000 Interest Payable S 37,500 S 67,500 Income Taxes Payable S 235,375 S 321,125 Longterm Notes Payable S 625,000 S 875,000 Common Stock S 1,000,000 S 1,250,000 Retained Earnings @ Jan lst S 260,000 S 597,125 Owners Withdrawals S 50,000 Dividends S 100,000 5 155,050 Equipment Sales S 7,901,250 S 12,718,750 Office Salaries S 900,000 5 1292.500 Insurance S 20,000 5 27,500 IT Network Expense S 62,500 S 93,750 Utilities $ 120,000 5 192,500 Sales Salaries 81 Commissions S 260,000 5 555,050 Advertising S 263,750 S 352,500 Interest Expense S 37,500 S 52,500 Maintenance 8: Repair Expense S 121,250 S 206,250 Rent S 240,000 S 330,000 Income Tax Expense S 235,375 S 321,125 Depreciation Expense Equipment S 150,000 S 150,000 Cost of Goods Sold S 5,053,750 S 8,543, 750 Total 5 10,871,625 5 10,871,625 5 17,004,500 5 17,004,500 Appendix B - Financial Statements Basic Templates . Below are the titles you should include in your financial statements. You will need to add many rows to include all the right accounts under each section. . Ensure EVERY account is listed somewhere on these financial statements. DO NOT just put the totals. JJ SPORTS Inc. Income Statement Revenues: **list of accounts here* * Gross Profit Operating Expenses: Selling Expenses **list of accounts here* * Total Selling Expenses General & Admin Expenses ***list of accounts here*** Total G & A Expenses Total Operating Expenses EBIT **account here** Earnings before Tax * *account here* * Earnings After TaxJJ SPORTS Inc. Statement of Changes in Owner's Equity Common Stock Retained Earnings **list of accounts here* * Retained Earnings Owner's Equity