Question

ABC reports the following accounts and balances at December 31, 2017:

Accounts Payable                     $22,800

Accounts Receivable                  18,800

Cash                                           24,400

Land                                           82,400

Machine                                   129,200

Merchandise Inventory              63,600

Long-term Note Payable            79,200

Short-term Note Payable            14,400

Paid-in Capital                         200,000

Retained Earnings                             ?

Sales Revenue                          122,000

Cost of Goods Sold                     80,000

Operating Expenses                   40,000

Required:

Prepare a balance sheet at December 31, 2017 Also, prepare an income statement for the year ended December 31, 2017. Ignore depreciation expense and interest expense.

Answer 1

prepare an income statement for the year ended December 31, 2017.

Sales revenue	122000
Less: Cost of goods sold	(80000)
Gross profit	42000
Less: Operating expense	(40000)
Net income	2000

repare a balance sheet at December 31, 2017

Assets
Current assets
Cash	24400
Account receivable	18800
Merchandise inventory	63600
Total current assets		106800
Non current assets
Land	82400
Machine	129200
Total non current assets		211600
Total assets		318400
Liabilities and stockholder's equity
Current liabilties
Account payable	22800
Short-term Note Payable	14400
Total current liabilties		37200
Long term liabiltiies
Long-term Note Payable	79200
Total long term liabilties		79200
Total liabilties		116400
Stockholder's equity
Common stock	200000
Retained earnings	2000
Total stockholder's equity		202000
Total liabillites and stockholder's equity		318400