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Posted on Sep 12, 2024

You are an accountant at Rock Castle Construction. Your boss has asked that you create general purpose financial statements from a trial balance that he

You are an accountant at Rock Castle Construction. Your boss has asked that you create general purpose financial statements from a trial balance that he has created for you. Additionally, the company is for sale and you need to draft a letter to potential buyers explaining the overall financial health and profitability of the business. You should use several appropriate financial measure formulas as evidence. Your boss has strongly reminded you that the company needs to sell or you may be out of a job. You have been strongly encouraged to write a very positive letter to potential buyers. Generally, buyers are most interested in knowing about profits.

1.) Create the four general purpose financial statements for the year ended Dec 31, 2019 i.e. Income statement, Balance Sheet, Statement of Owners Equity/Retained Earnings, Statement of Cash Flows.

2.) Write a letter to potential buyers.

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Dec 31, 19 Debit Credit 17,910.19 35,068.48 755.05 10300 - Savings 10100 . Checking 10400 Petty Cash 11000 Accounts Receivable 12000 . Undeposited Funds 12100 - Inventory Asset 92,707.93 2,440.00 30,683.38 12800. Employee Advances 832.00 4,050.00 3,703.02 4,000.00 34,326.00 78,936.91 325,000.00 15,300.00 90,000.00 110,344.60 1,720.00 15,536.30 150,094.20 382.62 1,364.00 2,118.82 0.00 13100. Pre-paid Insurance 13400 - Retainage Receivable 1600. scooter 15000 . Furniture and Equipment 15100 - Vehicles 15200. Buildings and Improvements 15300 - Construction Equipment 16900. Land 17000. Accumulated Depreciation 18700 - Security Deposits 20000. Accounts Payable 20500. QuickBooks Credit Card 20600. CalOil Credit Card 24000. Payroll Liabilities:24010 - Federal Withholding 24000. Payroll Liabilities: 24020 FICA Payable 24000 . Payroll Liabilities:24030 - AEIC Payable 24000. Payroll Liabilities:24040 FUTA Payable 24000. Payroll Liabilities:24050. State Withholding 24000 . Payroll Liabilities:24060 - SUTA Payable 24000. Payroll Liabilities:24070 . State Disability Payable 24000. Payroll Liabilities:24080. Worker's Compensation 24000. Payroll Liabilities:24100. Emp. Health Ins Payable 25500 - Sales Tax Payable 2600. Scooter Loan 23000. Loan - Vehicles (Van) 23100 Loan - Vehicles (Utility Truck) 23200 Loan - Vehicles (Pickup Truck) 28100. Loan - Construction Equipment 28200. Loan - Furniture/Office Equip 28700 . Note Payable - Bank of Anycity 28900. Mortgage - Office Building 30100 - Capital Stock 32000 . Retained Earnings 100.00 299.19 110.00 48.13 1,214.31 150.00 957.63 4,000.00 10,501.47 19,936.91 22,641.00 13,911.32 21,000.00 2,693.21 296,283.00 39,273.75 61,756.76 0.00 36,729.25 208,225.42 119,920.67 82,710.35 48.35 1,223.75 896.05 40100 - Construction Income 40100 Construction Income:40110. Design Income 40100 Construction Income:40130 . Labor Income 40100 Construction Income:40140 - Materials Income 40100 Construction Income:40150 Subcontracted Labor Income 40100 - Construction Income:40199. Less Discounts given 40500 . Reimbursement Income:40520 . Permit Reimbursement Income 40500. Reimbursement Income:40530 Reimbursed Freight & Delivery 50100 Cost of Goods Sold 54000. Job Expenses:54200 - Equipment Rental 54000. Job Expenses:54300. Job Materials 54000. Job Expenses:54400. Permits and Licenses 54000. Job Expenses:54500. Subcontractors 54000. Job Expenses:54520. Freight & Delivery 54000. Job Expenses:54599 . Less Discounts Taken food 14,766.19 1,850.00 99,435.90 700.00 63,217.95 797.10 201.81 44.95 60100. Automobile:60110 Fuel 60100. Automobile:60120. Insurance 60100 - Automobile:60130. Repairs and Maintenance 1,588.70 2.850.24 2,406.00 60300. Bad debt 300.00 125.00 582.06 5,885.96 13,657.07 151,995.65 110,400.10 8,445.61 60600. Bank Service Charges 62100. Insurance:62110 . Disability Insurance 62100. Insurance:62120 Liability Insurance 62100 - Insurance:62130. Work Comp 62400. Interest Expense:62420 . Loan Interest 62700. Payroll Expenses:62710 - Gross Wages 62700. Payroll Expenses:62720 - Payroll Taxes 62700. Payroll Expenses:62730 - FUTA Expense 62700. Payroll Expenses:62740 SUTA Expense 63100. Postage 63600 - Professional Fees:63610. Accounting 64200 Repairs:64210 Building Repairs 64200 Repairs:64220 Computer Repairs 64200. Repairs:64230. Equipment Repairs 64800 Tools and Machinery 65100 . Utilities:65110 . Gas and Electric 65100. Utilities:65120. Telephone 65100. Utilities:65130 - Water 70100 - Other Income 70200. Interest Income TOTAL 268.00 1,233.50 104.20 250.00 175,00 0.00 1,350.00 2,820.68 1,164.16 841.15 264.00 146.80 229.16 1.225.000.48 1,225,000.48 10300 Savings 10100 . Checking 10400 Petty Cash 11000 - Accounts Receivable 12000 . Undeposited Funds 12100. Inventory Asset 12800. Employee Advances 13100. Pre-paid Insurance 13400 - Retainage Receivable 15000. Furniture and Equipment 15100. Vehicles 15200 Buildings and Improvements 15300 - Construction Equipment Dec 31, 18 Debit Credit 15,881.03 36,810.16 500.00 21,249.39 18,252.08 12,767.04 770.00 4,943.02 1,796.72 22,826.00 78,936.91 325,000.00 15,300.00 90,000.00 110,344.60 1,720.00 13,100.00 0.00 530.00 16900 - Land 0.00 0.00 0.00 0.00 17000. Accumulated Depreciation 18700 - Security Deposits 20000. Accounts Payable 20500. QuickBooks Credit Card 20600. Caloil Credit Card 24000 - Payroll Liabilities:24010. Federal Withholding 24000. Payroll Liabilities:24020. FICA Payable 24000. Payroll Liabilities:24040. FUTA Payable 24000 - Payroll Liabilities:24050. State Withholding 24000 - Payroll Liabilities:24060. SUTA Payable 24000 . Payroll Liabilities:24070 - State Disability Payable 24000. Payroll Liabilities:24080. Worker's Compensation 25500 - Sales Tax Payable 23000. Loan - Vehicles (Van) 23100 Loan - Vehicles (Utility Truck) 23200 Loan - Vehicles (Pickup Truck) 28100 Loan - Construction Equipment 28200. Loan - Furniture/Office Equip 28700 . Note Payable - Bank of Anycity 28900. Mortgage - Office Building 30100 - Capital Stock 32000. Retained Earnings 40100. Construction Income:40110 . Design Income 40100 Construction Income:40130. Labor Income 40100 Construction Income:40140. Materials Income 40100 Construction Income: 40150 Subcontracted Labor Income 72.18 16.290.52 19,936.91 22,641.00 14,343.11 21,000.00 31,180.52 296,283.00 39,273.75 36,213.97 3,400.00 16,335.00 36,023.77 112,666.50 INUlllldi NU SUDLlly reduilly I 40500 - Reimbursement Income:40520 . Permit Reimbursement Income 835.00 50100. Cost of Goods Sold 54000 - Job Expenses: 54300 - Job Materials 54000 Job Expenses:54400 . Permits and Licenses 54000. Job Expenses:54500. Subcontractors 5,620.96 12,171.60 225.00 53,350.00 1,715.00 2,850.24 2,550.00 150.00 60100 - Automobile:60110 - Fuel 44,435.91 600.00 5,092.98 3,300.00 60100 . Automobile:60120. Insurance 60100 . Automobile:60130 - Repairs and Maintenance 60600 - Bank Service Charges 60900 Depreciation Expense 62100. Insurance:62110 . Disability Insurance 62100. Insurance:62120. Liability Insurance 62100. Insurance:62130. Work Comp 62400. Interest Expense:62420. Loan Interest 63600. Professional Fees:63610. Accounting 64200. Repairs:64220. Computer Repairs 64200 - Repairs:64230 - Equipment Repairs 64800 Tools and Machinery 65100 . Utilities:65110 Gas and Electric 65100 - Utilities:65120 - Telephone 65100 . Utilities:65130 Water 70200. Interest Income TOTAL 4,705.48 250.00 714.00 1,800.00 1,457.91 1,841.43 880.00 288.00 281.03 790.750.86 790.750.86 Dec 31, 19 Debit Credit 17,910.19 35,068.48 755.05 10300 - Savings 10100 . Checking 10400 Petty Cash 11000 Accounts Receivable 12000 . Undeposited Funds 12100 - Inventory Asset 92,707.93 2,440.00 30,683.38 12800. Employee Advances 832.00 4,050.00 3,703.02 4,000.00 34,326.00 78,936.91 325,000.00 15,300.00 90,000.00 110,344.60 1,720.00 15,536.30 150,094.20 382.62 1,364.00 2,118.82 0.00 13100. Pre-paid Insurance 13400 - Retainage Receivable 1600. scooter 15000 . Furniture and Equipment 15100 - Vehicles 15200. Buildings and Improvements 15300 - Construction Equipment 16900. Land 17000. Accumulated Depreciation 18700 - Security Deposits 20000. Accounts Payable 20500. QuickBooks Credit Card 20600. CalOil Credit Card 24000. Payroll Liabilities:24010 - Federal Withholding 24000. Payroll Liabilities: 24020 FICA Payable 24000 . Payroll Liabilities:24030 - AEIC Payable 24000. Payroll Liabilities:24040 FUTA Payable 24000. Payroll Liabilities:24050. State Withholding 24000 . Payroll Liabilities:24060 - SUTA Payable 24000. Payroll Liabilities:24070 . State Disability Payable 24000. Payroll Liabilities:24080. Worker's Compensation 24000. Payroll Liabilities:24100. Emp. Health Ins Payable 25500 - Sales Tax Payable 2600. Scooter Loan 23000. Loan - Vehicles (Van) 23100 Loan - Vehicles (Utility Truck) 23200 Loan - Vehicles (Pickup Truck) 28100. Loan - Construction Equipment 28200. Loan - Furniture/Office Equip 28700 . Note Payable - Bank of Anycity 28900. Mortgage - Office Building 30100 - Capital Stock 32000 . Retained Earnings 100.00 299.19 110.00 48.13 1,214.31 150.00 957.63 4,000.00 10,501.47 19,936.91 22,641.00 13,911.32 21,000.00 2,693.21 296,283.00 39,273.75 61,756.76 0.00 36,729.25 208,225.42 119,920.67 82,710.35 48.35 1,223.75 896.05 40100 - Construction Income 40100 Construction Income:40110. Design Income 40100 Construction Income:40130 . Labor Income 40100 Construction Income:40140 - Materials Income 40100 Construction Income:40150 Subcontracted Labor Income 40100 - Construction Income:40199. Less Discounts given 40500 . Reimbursement Income:40520 . Permit Reimbursement Income 40500. Reimbursement Income:40530 Reimbursed Freight & Delivery 50100 Cost of Goods Sold 54000. Job Expenses:54200 - Equipment Rental 54000. Job Expenses:54300. Job Materials 54000. Job Expenses:54400. Permits and Licenses 54000. Job Expenses:54500. Subcontractors 54000. Job Expenses:54520. Freight & Delivery 54000. Job Expenses:54599 . Less Discounts Taken food 14,766.19 1,850.00 99,435.90 700.00 63,217.95 797.10 201.81 44.95 60100. Automobile:60110 Fuel 60100. Automobile:60120. Insurance 60100 - Automobile:60130. Repairs and Maintenance 1,588.70 2.850.24 2,406.00 60300. Bad debt 300.00 125.00 582.06 5,885.96 13,657.07 151,995.65 110,400.10 8,445.61 60600. Bank Service Charges 62100. Insurance:62110 . Disability Insurance 62100. Insurance:62120 Liability Insurance 62100 - Insurance:62130. Work Comp 62400. Interest Expense:62420 . Loan Interest 62700. Payroll Expenses:62710 - Gross Wages 62700. Payroll Expenses:62720 - Payroll Taxes 62700. Payroll Expenses:62730 - FUTA Expense 62700. Payroll Expenses:62740 SUTA Expense 63100. Postage 63600 - Professional Fees:63610. Accounting 64200 Repairs:64210 Building Repairs 64200 Repairs:64220 Computer Repairs 64200. Repairs:64230. Equipment Repairs 64800 Tools and Machinery 65100 . Utilities:65110 . Gas and Electric 65100. Utilities:65120. Telephone 65100. Utilities:65130 - Water 70100 - Other Income 70200. Interest Income TOTAL 268.00 1,233.50 104.20 250.00 175,00 0.00 1,350.00 2,820.68 1,164.16 841.15 264.00 146.80 229.16 1.225.000.48 1,225,000.48 10300 Savings 10100 . Checking 10400 Petty Cash 11000 - Accounts Receivable 12000 . Undeposited Funds 12100. Inventory Asset 12800. Employee Advances 13100. Pre-paid Insurance 13400 - Retainage Receivable 15000. Furniture and Equipment 15100. Vehicles 15200 Buildings and Improvements 15300 - Construction Equipment Dec 31, 18 Debit Credit 15,881.03 36,810.16 500.00 21,249.39 18,252.08 12,767.04 770.00 4,943.02 1,796.72 22,826.00 78,936.91 325,000.00 15,300.00 90,000.00 110,344.60 1,720.00 13,100.00 0.00 530.00 16900 - Land 0.00 0.00 0.00 0.00 17000. Accumulated Depreciation 18700 - Security Deposits 20000. Accounts Payable 20500. QuickBooks Credit Card 20600. Caloil Credit Card 24000 - Payroll Liabilities:24010. Federal Withholding 24000. Payroll Liabilities:24020. FICA Payable 24000. Payroll Liabilities:24040. FUTA Payable 24000 - Payroll Liabilities:24050. State Withholding 24000 - Payroll Liabilities:24060. SUTA Payable 24000 . Payroll Liabilities:24070 - State Disability Payable 24000. Payroll Liabilities:24080. Worker's Compensation 25500 - Sales Tax Payable 23000. Loan - Vehicles (Van) 23100 Loan - Vehicles (Utility Truck) 23200 Loan - Vehicles (Pickup Truck) 28100 Loan - Construction Equipment 28200. Loan - Furniture/Office Equip 28700 . Note Payable - Bank of Anycity 28900. Mortgage - Office Building 30100 - Capital Stock 32000. Retained Earnings 40100. Construction Income:40110 . Design Income 40100 Construction Income:40130. Labor Income 40100 Construction Income:40140. Materials Income 40100 Construction Income: 40150 Subcontracted Labor Income 72.18 16.290.52 19,936.91 22,641.00 14,343.11 21,000.00 31,180.52 296,283.00 39,273.75 36,213.97 3,400.00 16,335.00 36,023.77 112,666.50 INUlllldi NU SUDLlly reduilly I 40500 - Reimbursement Income:40520 . Permit Reimbursement Income 835.00 50100. Cost of Goods Sold 54000 - Job Expenses: 54300 - Job Materials 54000 Job Expenses:54400 . Permits and Licenses 54000. Job Expenses:54500. Subcontractors 5,620.96 12,171.60 225.00 53,350.00 1,715.00 2,850.24 2,550.00 150.00 60100 - Automobile:60110 - Fuel 44,435.91 600.00 5,092.98 3,300.00 60100 . Automobile:60120. Insurance 60100 . Automobile:60130 - Repairs and Maintenance 60600 - Bank Service Charges 60900 Depreciation Expense 62100. Insurance:62110 . Disability Insurance 62100. Insurance:62120. Liability Insurance 62100. Insurance:62130. Work Comp 62400. Interest Expense:62420. Loan Interest 63600. Professional Fees:63610. Accounting 64200. Repairs:64220. Computer Repairs 64200 - Repairs:64230 - Equipment Repairs 64800 Tools and Machinery 65100 . Utilities:65110 Gas and Electric 65100 - Utilities:65120 - Telephone 65100 . Utilities:65130 Water 70200. Interest Income TOTAL 4,705.48 250.00 714.00 1,800.00 1,457.91 1,841.43 880.00 288.00 281.03 790.750.86 790.750.86