In: Accounting
Sage Inc. experienced the following transactions for 2018, its first year of operations:
Number of Days Past Due | Amount | Percent Likely to Be Uncollectible | Allowance Balance | ||
Current | $ | 20,400 | 0.01 | ||
0–30 | 8,500 | 0.05 | |||
31–60 | 1,700 | 0.10 | |||
61–90 | 1,700 | 0.20 | |||
Over 90 days | 1,700 | 0.50 | |||
b. Prepare the income statement, statement of changes in stockholders’ equity, balance sheet, and statement of cash flows for Sage Inc. for 2018.
SAGE INC. | ||
Balance Sheet | ||
As of the End of the Year 2018 | ||
Assets | ||
not attempted | not attempted | |
not attempted | not attempted | |
not attempted | not attempted | 0 |
not attempted | not attempted | |
Total assets | $0 | |
Liabilities | ||
not attempted | not attempted | |
not attempted | not attempted | |
Total liabilities | 0 | |
Stockholders’ equity | ||
not attempted | not attempted | |
not attempted | not attempted | |
not attempted | not attempted | |
Total stockholders’ equity | 0 | |
Total liabilities and stockholders’ equity | $0 |
SAGE INC. | ||
Statement of Cash Flows | ||
For the Year Ended 2018 | ||
Cash flows from operating activities: | ||
not attempted | not attempted | |
not attempted | not attempted | |
not attempted | not attempted | |
not attempted | not attempted | |
Net cash flow from operating activities | $0 | |
Cash flows from investing activities | not attempted | |
Cash flows from financing activities | ||
not attempted | not attempted | |
not attempted | not attempted | |
Net cash flows from financing activities | 0 | |
Net change in cash | 0 | |
not attempted | not attempted | |
Ending cash balance | $0 |
Net realizable value |
a.) | Number of Days Past Due | Amount $ | Percent Likely to Be Uncollectible | Allowance Balance $ | |||
Current | 20,400 | 0.01 | 204 | ||||
0–30 | 8,500 | 0.05 | 425 | ||||
31–60 | 1,700 | 0.1 | 170 | ||||
61–90 | 1,700 | 0.2 | 340 | ||||
Over 90 days | 1,700 | 0.5 | 850 | ||||
Total | 34,000 | 1,989 | |||||
b.) | SAGE INC. | ||||||
Income Statement | Amount $ | ||||||
Sales | 326,000 | ||||||
Less: Cost of goods sold | 164,000 | ||||||
Gross Profit | 162,000 | ||||||
Less: Salaries Expense | 54,000 | ||||||
Less: Bad Debt Expense | 1,989 | ||||||
Less: Other operating expenses | 70,000 | ||||||
Net Profit | 36,011 | ||||||
SAGE INC. | |||||||
Statement of Change in Stockholders' Equity | |||||||
Common Stock | Retained earnings | Total $ | |||||
On January 1,2018 | - | - | - | ||||
Add: Net Profit | - | 36,011 | 36,011 | ||||
Add: Issued during 2018 | 110,000 | - | 110,000 | ||||
On December 31,2018 | 110,000 | 36,011 | 146,011 | ||||
SAGE INC. | |||||||
Balance Sheet | |||||||
As of the End of the Year 2018 | Amount $ | ||||||
Assets | |||||||
Cash( 110,000 + 292,000 - 185,000 - 54,000 - 70,000 ) | 93,000 | ||||||
Accounts Receivable (net of allowance ) | 32,011 | ||||||
(326,000 - 292,000 - 1,989 ) | |||||||
Merchandise Inventory (205,000 - 164,000 ) | 41,000 | ||||||
Total assets | 166,011 | ||||||
Liabilities | |||||||
Accounts Payable | 20,000 | ||||||
(205,000 - 185,000 ) | |||||||
Total liabilities | 20,000 | ||||||
Stockholders’ equity | |||||||
Common Stock | 110,000 | ||||||
Retained earnings | 36,011 | ||||||
Total stockholders’ equity | 146,011 | ||||||
Total liabilities and stockholders’ equity | 166,011 | ||||||
SAGE INC. | |||||||
Statement of Cash Flows | |||||||
For the Year Ended 2018 | Amount $ |
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