Question

Superior Hardwood Company distributes hardwood products to small furniture manufacturers. The adjusted trial balance data given below is from the firm’s worksheet for the year ended December 31, 2019.

ACCOUNTS	Debit			Credit
Cash	$	23,400
Petty Cash Fund		400
Notes Receivable, due 2020		11,100
Accounts Receivable		89,000
Allowance for Doubtful Accounts				$	5,300
Merchandise Inventory		227,000
Warehouse Supplies		2,790
Office Supplies		1,350
Prepaid Insurance		8,100
Land		39,000
Building		171,000
Accumulated Depreciation—Building					49,800
Warehouse Equipment		33,500
Accumulated Depreciation—Warehouse Equipment					15,300
Delivery Equipment		47,500
Accumulated Depreciation—Delivery Equipment					18,200
Office Equipment		21,500
Accumulated Depreciation—Office Equipment					9,900
Notes Payable, due 2020					19,500
Accounts Payable					38,300
Interest Payable					510
Mortgage Payable					57,500
Loans Payable, Long-term					13,500
Charles Ronie, Capital (Jan. 1)					417,560
Charles Ronie, Drawing		126,300
Income Summary		237,000			227,000
Sales					1,671,000
Sales Returns and Allowances		17,500
Interest Income					1,510
Purchases		760,000
Freight In		13,100
Purchases Returns and Allowances					7,740
Purchases Discounts					10,460
Warehouse Wages Expense		192,600
Warehouse Supplies Expense		6,400
Depreciation Expense—Warehouse Equipment		5,100
Salaries Expense—Sales		262,200
Travel and Entertainment Expense		20,800
Delivery Wages Expense		59,630
Depreciation Expense—Delivery Equipment		9,100
Salaries Expense—Office		69,900
Office Supplies Expense		3,300
Insurance Expense		5,500
Utilities Expense		8,590
Telephone Expense		5,820
Payroll Taxes Expense		55,500
Property Taxes Expense		4,900
Uncollectible Accounts Expense		5,100
Depreciation Expense—Building		8,300
Depreciation Expense—Office Equipment		3,300
Interest Expense		7,500
Totals	$	2,563,080		$	2,563,080

Required:

Prepare a classified income statement for the year ended December 31, 2019. The expense accounts represent warehouse expenses, selling expenses, and general and administrative expenses.

Prepare a statement of owner’s equity for the year ended December 31, 2019. No additional investments were made during the period.

Prepare a classified balance sheet as of December 31, 2019. The mortgage payable extends for more than a year.

Analyze:
What is the current ratio for this business?

Required 1

Required 2

Required 3

Analyze

Prepare a classified income statement for the year ended December 31, 2019. The expense accounts represent warehouse expenses, selling expenses, and general and administrative expenses.

SUPERIOR HARDWOOD COMPANY Income Statement Operating revenue Net sales Cost of goods sold Merchandise inventory, January 1, 2019 Delivered cost of purchases Net delivered cost of purchases Total merchandise available for sale Gross profit on sales Operating expenses Warehouse expenses Total warehouse expenses Selling expenses Total selling expenses General and administrative expenses Total general and administrative exp. Total operating expenses Income from operations Other income Other expenses Net nonoperating expenses Net income for year

Answer 1