Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Using the Trial Balance (as of 9/30/22) and assumptions below, generate a Balance Sheet, Income Statement, and Statement of Equity. Assume the following: The income
Using the Trial Balance (as of 9/30/22) and assumptions below, generate a Balance Sheet, Income Statement, and Statement of Equity.
Assume the following: |
The income tax rate is 5% |
$25,000 of the long-term note payable is due in the current year |
The investment account is considered short-term in nature |
At this point no taxes have been accrued |
A cash dividend for $13,000 was declared on 9-28-2022 to be paid 10-7-2022, this has not been recorded |
The company uses the first-in-first-out inventory method |
Based on the Accounts receivable aging method the allowance should be 7,000 |
Hint: Total Assets = 1,002,250 |
This is what I have so far:
What am I doing wrong? The balance sheet needs to balance and I know the net income is off.
Balance Sheet Current Assests \begin{tabular}{|l|cc|} \hline Cash & $ & 55,000.00 \\ \hline Short term Investment & $ & 57,500.00 \\ \hline Accounts Receivable & $ & 92,000.00 \\ \hline Less: Allowance for Doubtful Accounts & $ & (4,000.00) \\ \hline Inventory & $ & 154,000.00 \\ \hline Prepaid Insurance - Current & $ & 4,250.00 \\ \hline Total Current Assets & $ & 358,750.00 \\ \hline \end{tabular} Property, Plant, \& Equipment \begin{tabular}{l|cc} \hline Land & $282,000.00 \\ \hline Buildings & $410,000.00 \\ Less: Accumulated Dep - Buildings & $(256,000.00) \\ \hline Equipment & $109,500.00 \\ Less: Accumulated Depreciation - Equipment & $4(73,000.00) \\ Automobiles & $47,000.00 \\ Less: Accumulated Depreciation - Automobiles & $(21,000.00) \\ Net Property, Plant, \& Equipment & $478,500.00 \end{tabular} Intangible Assests \begin{tabular}{|l|rr} \hline Patent & S & 4,500.00 \\ \hline Good Will & $ & 163,500.00 \\ \hline Total Intangible Assests & S & 168,000.00 \end{tabular} Total Assests $1,005,250.00 Current Liabilites \begin{tabular}{l|rr} \hline Accounts Payable & $ & 64,000.00 \\ \hline Wages Payable & $ & 14,000.00 \\ \hline Unearned Revenues & $ & 6,800.00 \\ \hline Current Note Payable & $ & 25,000.00 \\ \hline Dividend Payable & $ & 13,000.00 \\ \hline Total Current Liabilites & $122,800.00 \end{tabular} Long Term Note Payable \$ 189,000.00 Total Liabilites \$ 311,800.00 Equity \begin{tabular}{l|lr} \hline Common Stock & $ & 261,000.00 \\ \hline Additional Paid in Capital- Common & $ & 24,000.00 \\ \hline Preferred Stock & $ & 37,000.00 \\ \hline Additional Paid in Capital - Preferred & $ & 14,000.00 \\ \hline Treasury Stock & $ & 3,800.00 \\ \hline Additional Paid in Capital - Treasury & $ & 1,500.00 \\ \hline Non Controlling Interest & $ & 5,000.00 \end{tabular} \begin{tabular}{|l|lr} \hline Retained Earnings & $ & 301,000.00 \\ \hline Accumulated Comprehensive Income & $ & 7,000.00 \end{tabular} Total Equity 5654,300.00 Total Liabilities \& Equity \$ 966,100.00 Income Statement \begin{tabular}{l|lr} Sales & S 301,000.00 \\ Less: Sales Returns & $ & (4,500.00) \\ Less: Sales Discount & $ & (3,700.00) \\ \hline Net Sales & $ & 292,800.00 \\ \hline \end{tabular} \begin{tabular}{|l|l|} \hline Less Cost of Goods Sold & $134,000.00 \\ \hline Gross Profit on Sales & $158,800.00 \end{tabular} Operating Expenses \begin{tabular}{l|lr} Wage Expense & $ & 31,500.00 \\ \hline Rent Expense & $ & 8,000.00 \\ Auto Expense & $ & 7,000.00 \\ Utilities Expense & $ & 6,500.00 \\ \hline Advertising Expense & $ & 6,400.00 \\ Insurance Expense & $ & 4,000.00 \\ Supplies Expense & $ & 4,000.00 \\ Employee Benefit Expense & $ & 4,000.00 \\ Credit Card Expense & $ & 3,900.00 \\ Dues Expense & $ & 750.00 \end{tabular} \begin{tabular}{l|l} Total Operating Expenses & \$ 76,050.00 \end{tabular} Operating lncome $82,750.00 Other Income \& Expenses \begin{tabular}{l|lr} Income Before Tax & $ & 88,750.00 \\ \hline Income Tax Expense & $ & 4,437.50 \end{tabular} Net Income $84,312.50 Statement of Equity \begin{tabular}{|l|rr} \hline Beginning Retained Earnings & S 301,000.00 \\ \hline Current Period Income & $ & 84,312.50 \\ Less: Dividends & $ & 13,000.00 \\ \hline Ending Retainined Earning & $ & 372,312.50 \end{tabular}
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started