the last two photos are the questions to be answered

NAME DUE DATE 3/12/20 CROWN and PRINCE Crown & Prince are virtually identical companies, both companies began operations at the beginning of 2018 by issuing 20,000 shares, 35,00 par common stock $100,000 and long term debt of $200.000 During the year, both companies purchased inventory as follows: units Unit cost Jan-18 10,000 $4,00 Apr 18 10,000 $5.00 Aug-18 10.000 $800 Nov-18 10,000 $7.00 40,000 Total Cost 340.000 $50,000 $50.000 $70,000 $220,000 **** CROWN uses the first in, first-out (FIFO) method, and PRINCE uses the last-in, last-out (LIFO) method of inventory. Both companies sold 35.000 units. QUESTION 1: Compute the COST OF GOODS SOLD and INVENTORY for each company. SHOW YOUR CALCULATIONS CROWN COGS COGS Inventory Inventory Inventory *** During the year, both companies had sales (all for credit) of $500,000 QUESTION 2: Prepare the following portion of the Income Statement: CROWN PRINCE Sales Revenue COGS Gross Prof GP% QUESTION 3: Determine the BAD DEBT EXPENSE for each company CROWN PRINCE Bad Debt Expense - In early January, both companies purchased equipment costing $200,000 with a 10-year useful live & no salvage value CROWN USES the STRAIGHT LINE METHOD method of depreciation PRINCE USES the DOUBLE-DECLINING BALANCE method of depreciation QUESTION 4: Determine the depreciation expense of each company CROWN DEPRECIAION EXP. FOR 2018 0 DEPRECIAION EXP. FOR 2018 SL - Cost - Salvage Value Double Straight Line Rate Dep 2018 2019 2020 $40,000 $25,600 $25,600 20% 20% 20% Balat yr, and $160,000 $128.000 $102,400 QUESTIONS: Complete the income Statement PRINCE INCOME STATEMENT For the year ending Dec 31, 2018 CROWN INCOME STATEMENT For the year ending Dec 31, 2018 Sales Revenue COGS Gross Profit GP% Selling General & Adm. Expenses Depreciation Exp Bad Debt Exp. Other SGA $175,000 $175,000 Total SGA $175,000 $175.000 Net INCOME before Income Tax Income Tax (30%) NET INCOME *** Both companies paid a dividend of $10,000 to the stockholders QUESTION 6: Complete the Statement of Retained Earnings CROWN Statement of Retained Earrings For the year ending Dec 31, 2018 PRINCE Statement of Retained Earnings For the year ending Dec 31, 2018 Retained Earnings, 1. 1/1/2018 Net Income Dividends Retained Earnings, 1: 12/31/2018 QUESTION 7: Determine Eamings Per Share (show work) EPS- Net Income-Preferred Dividends Average # of shares outstanding Accounts Rec Although each customer must satisfy the credit requirements of the seller before the credit sale is approved, inevitably some accounts receivable become uncollectible. For example, a corporate customer may not be able to pay because it experienced a sales decline due to an economic downturn. Similarly, individu- als may be laid off from their jobs or be faced with unexpected hospital bills. The seller records these losses that result from extending credit as Bad Debt Expense. Such losses are a normal and necessary risk of doing business on a credit basis. Recently, when U.S. home prices fell, home foreclosures rose, and the econ- omy in general slowed, lenders experienced huge increases in their bad debt expense. For example, during a recent quarter Wachovia, a large U.S. bank now owned by Wells Fargo, increased bad debt expense from $108 million to $408 million. Similarly, American Express increased its bad debt expense by 70%. Accounting uses two methods for uncollectible accounts: (1) the direct write- off method, and (2) the allowance method. We explain each of these methods in the following sections. Alternative te will sometimes Expense called Accounts Expe NAME DUE DATE CROWN and PRINCE Crown Prince we w ay identical companies, both companies began operations the beginning of 2018 by issuing 2000 shares 55.00 por common stock $100.000 and long term of $200.000 During the companies purchased intory follow 55.00 56.00 - CROWN ILFO, method of PRINCESS the last try on companies old QUESTION Compute the COST OF GOODS SOLD INVENTORY each com SHOW YOUR CALCULATIONS Dung the ear, both mpanies hades (all for credit of $50.000 QUESTION 2. Prepare the flowing portion of the income Stement Sales Rever COGS Gross Pro r ne for bad debit Price Crowns the percent of mode e Aging of Accounts Receivable CROWN Estimated PERCENT OF SALES FOR LAD DEBT PRINCE AGING OF AR12012018 Estimated 51000 520 51 5 2 .000 53.00 QUESTIONS Determine the BAD DEBT EXPENSE for en Badett Expense In early January, both companies purchased equipment costing $200.000 with a 10-year useful live & no salvage value CROWN USES The STRAIGHT LINE METHOD method of depreciation PRINCE USES the DOUBLE-DECLINING BALANCE method of depreciation QUESTION 4 Determine the depreciation expense of CROWN PRINCE DEPRECIAION EXP. FOR 2018 DEPRECIAION EXP. FOR 2018 SILE Cost-Sale Value Double Straight Line Rate 2018 2019 2020 $40.000 $25,600 25 600 20% 20% Balatyr end $160.000 $120.000 $102 400 20% QUESTIONS Complete the income Statement CROWN INCOME STATEMENT For the year ending Dec 31, 2018 PRINCE INCOME STATEMENT For the year ending Dec 31, 2018 Sales Reven COGS Gross Profit GPS $175.000 Selling General & Adm. Expenses Depreciation Exp. Bad Debt Exp Other SGA TO SGA Net INCOME before Income Tax Income Tax (30%) NET INCOME Both companies paid a dividend of $10,000 to the stockholders QUESTION: Complete the statement of Retained Earnings CROWN Statement of Retained Earnings For the year ending Dec 31, 2018 PRINCE Statement of Retained Earnings For the year ending Dec 31, 2018 Retained Earnings, 1/1/16 1/1/18 Net Income Dividends Retained Earnings, 12/31/17 12/31/18 QUESTION 7: Determine Earnings Per Share (show work) EPS Net Income-Pfeferred Dividends Average of shares outstanding