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Balance Sheet & Income Statement Coast Ltd., which has just started trading on 1 January 2019,...

Balance Sheet & Income Statement Coast Ltd., which has just started trading on 1 January 2019, has the following account balances prior to the recording of the final month of the year: Account Balances as at 30 November 2019

Account $ Cash $3 000

Accounts receivable $3 400

Stock of Supplies $17 600

Rent $3 300

Property, Plant & Equipment - cost $36 000

Accounts payable $4 700

Bank Loan $9 000

Contributed capital (16 600 shares) $26 600

Sales revenue $70 000

Other expenses (excluding depreciation) $4 000

Wages $5 000

Cost of goods sold $38 000

In December 2019, the following transactions took place: 1. Credit sales $15,000 (cost of goods sold $7,000) 2. Credit purchases of goods $8,000 3. Cash sales $24,000 (cost of goods sold $15,000) 4. Paid rent for December $300 5. Paid wages of $1,800 6. Received $15,000 from debtors. 7. At the end of December, sold off an equipment that has costed $4,000 at the price of $3,500. The yearly depreciation expense of this equipment was $1,000. Additional information as below: 1. As at 31 December, the business was still owing $1,200 of wages to the staff. 2. Annual depreciation expense for the property, plant & equipment before the disposal of the equipment at transaction 7 was $9,000.

Required:

1. Record the Account balances prior to adjustments in the workbook. Then, calculate and record the Adjustments in the workbook, total and balance the workbook.

3. Prepare a properly constructed Balance Sheet and Income Statement.

Expert Solution

ekkarill92 answered 1 year ago

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