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Deedle company began the year with the following account balances: Cash $15,000 Accounts receivable $42,000 Inventory...

Deedle company began the year with the following account balances:

Cash

$15,000

Accounts receivable

$42,000

Inventory

$33,000

Accounts payable

$24,000

Paid-in capital

$45,000

Retained earnings

$21,000

During the year, Deedle had the following transactions:

a. Borrowed $30,000 on a long-term loan

b. Interest expense for the year was $3,000. This amount has not yet been paid in cash

c. Sales for the year were $500,000, all on account

d. Cash collections of accounts receivable, $280,000

e. Purchased inventory on account, $380,000

f. Cost of inventory sold was $350,000

g. Paid accounts payable, $173,000

h. Paid wage expense, $137,000

Q) Prepare an income statement for the year and a balance sheet (next page) as of the end of the year.

Solutions

Expert Solution

Q) Prepare an income statement for the year

Q) a balance sheet (next page) as of the end of the year.

working notes

  • cash balance
  • Cash -Beginning balance $      15,000
    Less : Wages paid $ (137,000)
    Less : payment to account payable $ (173,000)
    Add : received from account receivable $   280,000
    Add : long term loan borrowal $      30,000
    cash as of the end of the year. $      15,000

ekkarill92 answered 2 years ago
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