1. Tim Lumber buys $350,000 more inventory, pays $150,000 cash now, balance due to suppliers next month. Pays cash in Mo. 11 against Accts Payable starting balance owed from Mo-10 Accts Payable.

2. Tim Lumber sells $475,000 of inventory to customers for $725,000 net. $450,000 were cash sales, balance of sales on credit due from customers in 30 days in next months accounting period.

3. $140,000 cash is collected in the current Month-11 period on Accts Receivable carried over from Mo.10

4. Building monthly rent paid cash in current period is $10,000 monthly going forward

5. Wage expense = $45,000, $30,000 cash, balance paid next period. Mo-10 Wage Payable is paid cash now.

6. $50,000 is repaid on the Bank loan. Mo. loan interest expense = $1,000, paid cash in current period.

7. Tim Lumber buys extra $200,000 inventory, pays $50,000 cash, balance on Supplier credit, due in Mo. 12

8. Office supplies and utilities expense together totaled $30,000, paid cash in the current period

9. Depreciation expense is $750 per month ($72,000 div. by 8 = $9,000 annual div. by 12 = $750 mo.)

10. Amortized monthly insurance policies expense of $300 recorded in the current period

11. Another $75,000 is received in Mo.11 from accts rec. owed by customers who bought on credit in month 11.

12. Dividends = $10,000 paid cash to Owner in Mo.11 Month-11 Retained Earns = Mo. 11 N.Inc - $10,000 Div

13. Tim Lumber owes $43,950 income tax on Mo.11 pre-tax profits, pays period 12. Tim Lumber pays Mo-10 Tax payable

PREPARE THE 11 PERIOD INCOME STATEMENT & ENDING BALANCE SHEET

WAGES PAYABLE 8 282.7 155 443 SUPPLIER PAYABLE CASH ACCT RECEIVABLE INVENTORY Prepaid Curr. Asset TOT CURR. ASSETS 220 LOC BANK LOAN 135 30 TAX. Oth PAYABLE .6 881.3 393 0 LT ASSETS Office Eq CURR. LIABILITIES LONG TERM DEBT TOTAL LIABILITIES 64.5 393 TOTAL ASSETS 945.8 OWNERS EQUITY RETAINED EARNS TOTAL EQUITY 200 352.8 552.8 945.8 TOT LIABS & EQUITY