Question

Prepare Income Statement and Balance Sheet from the following

Accounts payable		249,750
Accounts receivable	777,000
Accumulated depreciation		416,250
Advertising expense	55,500
Allowance for doubtful accounts		57,665
Bad debt expense	41,070
Capital gains		12,210
Capital stock (common)		999,000
Cash	376,623
Charitable contributions	29,970
Compensation expense	1,443,000
Cost of goods sold	921,300
Depreciation expense	22,200
Dividends (paid)	88,800
Dividends (received)		13,320
Entertainment expense	6,771
Equipment	832,500
Federal income tax expense	278,388
Gain from disposition of fixed assets		4,496
Interest expense	68,820
Interest income		16,650
Inventory	1,914,750
Investments in state & local bonds	155,400
Investments in stock	305,250
Investment in U.S. government bonds	77,700
Land	3,052,500
Maintenance expense	22,200
Meals expense	9,047
Miscellaneous expense	45,510
Mortgage payable		1,703,961
Other assets	299,700
Other current liabilities		146,520
Other liabilities		205,350
Other taxes expense	62,160
Pension plans expense	46,620
Professional services expense	35,520
Property tax expense	44,400
Retained earnings (1/1/2019)		3,518,700
Sales		3,796,700
Sales returns & allowance	46,620
State income tax expense	72,150
Supplies expense	9,102
	$11,140,571	$11,140,571

Answer 1

ANS: Income Statement

Particulars	Amount
Sale net return	3750080
Interest Income	16650
Gain from disposition of fixed assets	4496
Dividends (received)	13320
Capital gains	12210
Allowance for doubtful accounts	57665
TOTAL (A)	3854421
Advertising expense	55500
Bad debt expense	41070
Charitable contributions	29970
Compensation expense	1443000
Cost of goods sold	921300
Depreciation expense	22200
Dividends (paid)	88800
Entertainment expense	6771
Federal income tax expense	278388
Interest expense	68820
Maintenance expense	22200
Meals expense	9047
Miscellaneous expense	45510
Other taxes expense	62160
Pension plans expense	46620
Professional services expense	35520
Property tax expense	44400
State income tax expense	72150
Supplies expense	9102
TOTAL (B)	3302528
NET PROFIT	551892

  

BALANCESHEET

LIABILITIES	AMOUNT
Capital stock (common)	999000
Retained earnings (1/1/2019)	3518700
net profit from P & L	551892
Mortgage payable	1703961
Other current liabilities	146520
Other liabilities	205350
Accumulated depreciation	416250
Accounts payable	249750
TOTAL	7791423
ASSETS
Land	3,052,500
Equipment	832,500
Investments in state & local bonds	155400
Investments in stock	305250
Investment in U.S. government bonds	77700
Inventory	1,914,750
Accounts receivable	777000
Cash	376,623
Other Assets	299,700
TOTAL	7791423

Note: Rounding of Re. 1 is adjusted in Net profit that may arise in Trial Balance in Mortgage payable, which should be as 1703960.