Question

Prepare a:

A) income statement (multiple step)

B) balance sheet

C) cash flow statement

using the selected financial statement information and additional data presented below.

Balance sheet:   December 31 2015   

Cash       $52,000  

Accounts receivable (gross)       64,000  

Inventory       178,000  

Land       78,800  

Equipment       504,000  

TOTAL       $876,800  

Accumulated depreciation       $94,000  

Accounts payable       50,400  

Notes payable - short-term       67,200  

Notes payable - long-term       178,000  

Common stock       420,000  

Retained earnings       67,200  

TOTAL   $876,800     

Trial balance

December 31, 2016

DR    CR

Cash $60,000  

Accounts receivable …………………..     75,000  

Allowance for doubtful accounts………………....……………..4,500

Inventory 148,000  

Land 58,600  

Equipment 620,000  

Accumulated depreciation 40,000     

Accounts payable 48,300  

Notes payable - short-term 24,200

Notes payable - long-term 154,000

Common stock 420,000  

Retained earnings 67,200

Sales revenue 630,500

Cost of goods sold………………………….285,000

Salary expense……………………………….95,000

Advertising expense…………………………14,600

Depreciation expense……………………….10,000

Bad debt expense…………………....……….2,500

Other expense……………………………….20,000

Additional data for 2016:

1.   Land was sold at its original cost.

2.   Equipment was purchased

3. Notes were repaid

Answer 1

Please hit LIKE button if this helped. For any further explanation, please put your query in comment, will get back to you.
Balance Sheet as on December 31 2016
Cash		$         60,000
Accounts Receivable	$         75,000
Allowance for doubtful accounts	$          -4,500
Accounts Receivable,Net		$         70,500
Inventory		$       148,000
Total Current Assets		$       278,500
Land		$         58,600
Equipment	$       620,000
Accumulated Depreciation	$        -40,000
Equipment, Net		$       580,000
Total Assets		$       917,100
Accounts payable	$         48,300
Notes payable - short-term	$         24,200
Total Current Liabilities		$         72,500
Notes payable - long-term		$       154,000
Total Liabilities		$       226,500
Common stock.		$       420,000
Retained Earning (67200+203400 Net Income)		$       270,600
Total Liabilities and Equities		$       917,100
Cash Flow
Net Income		$       203,400
Adjustment to Net income:
Depreciation Expenses		$        -54,000
Increase in Receivable		$          -6,500
Decerease in inventory		$         30,000
Decrease in Accounts Payable		$          -2,100
Decrease in Note Payable		$        -43,000
Net Cash flow from Operating Activities		$       127,800
Cash flow from Investing activities:
Sale of Land		$         20,200
Purchase of Equipment		$     -116,000
Net Cash from Investing Activities		$        -95,800
Cash flow from financing activities:
Repayent of Note Payment		$        -24,000
Net Cash from Financing Activities		$        -24,000
Net Increase in Cash		$            8,000
Add: Beginning Balance		$         52,000
Ending Balance		$         60,000
Working Net Income:
Sales Revenue		$       630,500
Cost of Goods Sold		$       285,000
Gross Margin		$       345,500
Less:
Salary Expense	$         95,000
Advertising Expense	$         14,600
Depreciation Expense	$         10,000
Bad debt expense	$            2,500
Other Expense	$         20,000	$       142,100
Net Income		$       203,400